Deleting sprites/graphics

Basically, I drag a png into torque, then if I delete it from the sprites I can no longer drag an updated version in. I have to change the file name. I notice even deleting the sprite doesn't remove it from the image folder in the project files. Why? Is there an easier way to completely get rid of the file name reference and be able to drag it in again?

EDIT: I got it. It's working for some reason now after deleting the files in the image folder.