I think aus11 was asking for them to be completely removed from the list. Changing the domain status to cancelled (which as stated happens automatically via a cron job) doesn't remove it from the clients domain list.
I'm sure you already know how, but for those with WHMCS that don't, there are a number of easy ways to do it. Removing the domains from the client's account is the quickest way. You can also change CSS display attribute to none for the clientareatableterminated row class. In clientareadomains.tpl you can also update the foreach tag to simply not output the expired/cancelled domains to the array.
Hope that helps.