Though deleting the fixed network, sets the deleted flag in fixed_ips table to 't', lauching of VM fails because mapping cache does not get cleared. Launching throws this error.
2012-12-04 15:24:58 ERROR nova.compute.manager [req-77dd564a-3a5a-4c5c-8c33-5d5a8feb57ee 7e47b69879624465a81e1adad43dbcd2 ccb0ab914f6e49f2923632ce3b810447] [instance: 4a1efa1f-c526-4d25-841c-e4d893379b50] Instance failed to spawn
2012-12-04 15:24:58 TRACE nova.compute.manager [instance: 4a1efa1f-c526-4d25-841c-e4d893379b50] Traceback (most recent call last):
2012-12-04 15:24:58 TRACE nova.compute.manager [instance: 4a1efa1f-c526-4d25-841c-e4d893379b50]   File "/usr/lib/python2.7/dist-packages/nova/compute/manager.py", line 617, in _spawn
2012-12-04 15:24:58 TRACE nova.compute.manager [instance: 4a1efa1f-c526-4d25-841c-e4d893379b50]     self._legacy_nw_info(network_info), block_device_info)
2012-12-04 15:24:58 TRACE nova.compute.manager [instance: 4a1efa1f-c526-4d25-841c-e4d893379b50]   File "/usr/lib/python2.7/dist-packages/nova/exception.py", line 114, in wrapped
2012-12-04 15:24:58 TRACE nova.compute.manager [instance: 4a1efa1f-c526-4d25-841c-e4d893379b50]     return f(*args, **kw)
2012-12-04 15:24:58 TRACE nova.compute.manager [instance: 4a1efa1f-c526-4d25-841c-e4d893379b50]   File "/usr/lib/python2.7/dist-packages/nova/virt/libvirt/connection.py", line 918, in spawn
2012-12-04 15:24:58 TRACE nova.compute.manager [instance: 4a1efa1f-c526-4d25-841c-e4d893379b50]     block_device_info=block_device_info)
2012-12-04 15:24:58 TRACE nova.compute.manager [instance: 4a1efa1f-c526-4d25-841c-e4d893379b50]   File "/usr/lib/python2.7/dist-packages/nova/virt/libvirt/connection.py", line 1527, in to_xml
2012-12-04 15:24:58 TRACE nova.compute.manager [instance: 4a1efa1f-c526-4d25-841c-e4d893379b50]     rescue, block_device_info)
2012-12-04 15:24:58 TRACE nova.compute.manager [instance: 4a1efa1f-c526-4d25-841c-e4d893379b50]   File "/usr/lib/python2.7/dist-packages/nova/virt/libvirt/connection.py", line 1410, in _prepare_xml_info
2012-12-04 15:24:58 TRACE nova.compute.manager [instance: 4a1efa1f-c526-4d25-841c-e4d893379b50]     nics.append(self.vif_driver.plug(instance, network, mapping))
2012-12-04 15:24:58 TRACE nova.compute.manager [instance: 4a1efa1f-c526-4d25-841c-e4d893379b50]   File "/usr/lib/python2.7/dist-packages/nova/virt/libvirt/vif.py", line 100, in plug
2012-12-04 15:24:58 TRACE nova.compute.manager [instance: 4a1efa1f-c526-4d25-841c-e4d893379b50]     return self._get_configurations(network, mapping)
2012-12-04 15:24:58 TRACE nova.compute.manager [instance: 4a1efa1f-c526-4d25-841c-e4d893379b50]   File "/usr/lib/python2.7/dist-packages/nova/virt/libvirt/vif.py", line 70, in _get_configurations
2012-12-04 15:24:58 TRACE nova.compute.manager [instance: 4a1efa1f-c526-4d25-841c-e4d893379b50]     'ip_address': mapping['ips'][0]['ip'],
2012-12-04 15:24:58 TRACE nova.compute.manager [instance: 4a1efa1f-c526-4d25-841c-e4d893379b50] IndexError: list index out of range
2012-12-04 15:24:58 TRACE nova.compute.manager [instance: 4a1efa1f-c526-4d25-841c-e4d893379b50]
2012-12-04 15:24:58 ERROR nova.utils [req-77dd564a-3a5a-4c5c-8c33-5d5a8feb57ee 7e47b69879624465a81e1adad43dbcd2 ccb0ab914f6e49f2923632ce3b810447] Original exception being dropped
2012-12-04 15:24:58 TRACE nova.utils Traceback (most recent call last):
2012-12-04 15:24:58 TRACE nova.utils   File "/usr/lib/python2.7/dist-packages/nova/compute/manager.py", line 454, in _run_instance
2012-12-04 15:24:58 TRACE nova.utils     injected_files, admin_password)
2012-12-04 15:24:58 TRACE nova.utils   File "/usr/lib/python2.7/dist-packages/nova/compute/manager.py", line 617, in _spawn
2012-12-04 15:24:58 TRACE nova.utils     self._legacy_nw_info(network_info), block_device_info)
2012-12-04 15:24:58 TRACE nova.utils   File "/usr/lib/python2.7/dist-packages/nova/exception.py", line 114, in wrapped
2012-12-04 15:24:58 TRACE nova.utils     return f(*args, **kw)
2012-12-04 15:24:58 TRACE nova.utils   File "/usr/lib/python2.7/dist-packages/nova/virt/libvirt/connection.py", line 918, in spawn
2012-12-04 15:24:58 TRACE nova.utils     block_device_info=block_device_info)
2012-12-04 15:24:58 TRACE nova.utils   File "/usr/lib/python2.7/dist-packages/nova/virt/libvirt/connection.py", line 1527, in to_xml
2012-12-04 15:24:58 TRACE nova.utils     rescue, block_device_info)
2012-12-04 15:24:58 TRACE nova.utils   File "/usr/lib/python2.7/dist-packages/nova/virt/libvirt/connection.py", line 1410, in _prepare_xml_info
2012-12-04 15:24:58 TRACE nova.utils     nics.append(self.vif_driver.plug(instance, network, mapping))
2012-12-04 15:24:58 TRACE nova.utils   File "/usr/lib/python2.7/dist-packages/nova/virt/libvirt/vif.py", line 100, in plug
2012-12-04 15:24:58 TRACE nova.utils     return self._get_configurations(network, mapping)
2012-12-04 15:24:58 TRACE nova.utils   File "/usr/lib/python2.7/dist-packages/nova/virt/libvirt/vif.py", line 70, in _get_configurations
2012-12-04 15:24:58 TRACE nova.utils     'ip_address': mapping['ips'][0]['ip'],
2012-12-04 15:24:58 TRACE nova.utils IndexError: list index out of range
2012-12-04 15:24:58 TRACE nova.utils
2012-12-04 15:24:58 ERROR nova.rpc.amqp [req-77dd564a-3a5a-4c5c-8c33-5d5a8feb57ee 7e47b69879624465a81e1adad43dbcd2 ccb0ab914f6e49f2923632ce3b810447] Exception during message handling


Only way to clear cache is to restart nova-network . Then, launching a VM works fine.

Deleting a fixed network seems to require restart of nova-network.