It is possible to edit GPS Tracks imported into Google Earth, but it is not obvious or intuitive.
Lets say you opened a GPX file (imported from a GPS) in Google Earth, you'd have a new entry in in 'My Places', probably called 'GPS Device'. Keep on burrowing down through 'Tracks', "ACTIVE LOG n', finally to the 'Path'.
Right-click on the 'Path' and choose the 'Get Info' menu item.
Your path is now in editing mode (weird huh?).
In the dialog, you can change the colour of the path etc. etc. but in the main window, you may now edit the path (eek dialog, go away!!).
There are several different cursors.
The square cursor will add a new point, after the currently selected point (not easy to know which this is). This may be used to insert a new point between existing ones, or add a new point at the start or end.
The hand cursor appears when you mouse-over a point, this can be used to move it.
Hold down the Control key and click on a point to delete it.
That is all I found out about by playing.
I could not work out how to select or delete multiple points or anything advanced like that.
I do wish the guys at Google would let someone who knows Adobe Illustrator show them how path editing works there, it is far superior :)
NB. This is for the Mac version of GE, I am running 4.2.0180.1134 (beta).