To clear the status bar notification when the user selects it from the Notifications window, add the "FLAG_AUTO_CANCEL" flag to your Notification object. You can also clear it manually with cancel(int), passing it the notification ID, or clear all your Notifications with cancelAll().

<?xml version="1.0" encoding="utf-8"?>
<LinearLayout xmlns:android="http://schemas.android.com/apk/res/android"
    android:orientation="vertical"
    android:layout_width="fill_parent"
    android:layout_height="fill_parent"
    >
<TextView  
    android:layout_width="fill_parent" 
    android:layout_height="wrap_content" 
    android:text="@string/hello"
    />
<Button
    android:id="@+id/fire1"  
    android:layout_width="fill_parent" 
    android:layout_height="wrap_content" 
    android:text="- Fire Notification #1 -"
    />
<Button
    android:id="@+id/fire2"  
    android:layout_width="fill_parent" 
    android:layout_height="wrap_content" 
    android:text="- Fire Notification #2 -"
    />
<Button
    android:id="@+id/clear1"  
    android:layout_width="fill_parent" 
    android:layout_height="wrap_content" 
    android:text="- Clear Notification #1 -"
    />
<Button
    android:id="@+id/clear2"  
    android:layout_width="fill_parent" 
    android:layout_height="wrap_content" 
    android:text="- Clear Notification #2 -"
    />
<Button
    android:id="@+id/clearall"  
    android:layout_width="fill_parent" 
    android:layout_height="wrap_content" 
    android:text="- Clear ALL Notification -"
    />
</LinearLayout>
package com.AndroidStatusBarNotifications;
import android.app.Activity;
import android.app.Notification;
import android.app.NotificationManager;
import android.app.PendingIntent;
import android.content.Context;
import android.content.Intent;
import android.os.Bundle;
import android.view.View;
import android.view.View.OnClickListener;
import android.widget.Button;
public class AndroidStatusBarNotifications extends Activity {
 
 private static final int ID_My_Notification_1 = 1;
 private static final int ID_My_Notification_2 = 2;
 
    /** Called when the activity is first created. */
    @Override
    public void onCreate(Bundle savedInstanceState) {
        super.onCreate(savedInstanceState);
        setContentView(R.layout.main);
        Button buttonFire1 = (Button)findViewById(R.id.fire1);
        Button buttonFire2 = (Button)findViewById(R.id.fire2);
        Button buttonClear1 = (Button)findViewById(R.id.clear1);
        Button buttonClear2 = (Button)findViewById(R.id.clear2);
        Button buttonClearAll = (Button)findViewById(R.id.clearall);
        buttonFire1.setOnClickListener(buttonFire1OnClickListener);
        buttonFire2.setOnClickListener(buttonFire2OnClickListener);
        buttonClear1.setOnClickListener(buttonClear1OnClickListener);
        buttonClear2.setOnClickListener(buttonClear2OnClickListener);
        buttonClearAll.setOnClickListener(buttonClearAllOnClickListener);
    }
    
    private Button.OnClickListener buttonClearAllOnClickListener
    = new Button.OnClickListener(){
  @Override
  public void onClick(View arg0) {
   // TODO Auto-generated method stub
   String ns = Context.NOTIFICATION_SERVICE;
   NotificationManager mNotificationManager = (NotificationManager)getSystemService(ns);
   mNotificationManager.cancelAll();
  }};
    
    private Button.OnClickListener buttonClear1OnClickListener
    = new Button.OnClickListener(){
  @Override
  public void onClick(View arg0) {
   // TODO Auto-generated method stub
   clearNotification(ID_My_Notification_1);
  }};
  
 private Button.OnClickListener buttonClear2OnClickListener
 = new Button.OnClickListener(){
  @Override
  public void onClick(View arg0) {
   // TODO Auto-generated method stub
   clearNotification(ID_My_Notification_2);
  }};
  
 private void clearNotification(int notification_id){
  String ns = Context.NOTIFICATION_SERVICE;
  NotificationManager mNotificationManager = (NotificationManager)getSystemService(ns);
  mNotificationManager.cancel(notification_id);
 }
    
    private Button.OnClickListener buttonFire1OnClickListener
    = new Button.OnClickListener(){
  @Override
  public void onClick(View arg0) {
   // TODO Auto-generated method stub
   fireNotification(ID_My_Notification_1);
  }};
  
 private Button.OnClickListener buttonFire2OnClickListener
 = new Button.OnClickListener(){
  
  @Override
  public void onClick(View arg0) {
   // TODO Auto-generated method stub
   fireNotification(ID_My_Notification_2);
  }};
  
 private void fireNotification(int notification_id){
   //Get a reference to the NotificationManager
   String ns = Context.NOTIFICATION_SERVICE;
   NotificationManager mNotificationManager = (NotificationManager)getSystemService(ns);
   
   //Instantiate the Notification
   int icon = android.R.drawable.ic_dialog_alert;
   CharSequence tickerText = "Hello" + String.valueOf(notification_id);
   long when = System.currentTimeMillis();
   Notification notification = new Notification(icon, tickerText, when);
   
   //Define the Notification's expanded message and Intent
   Context context = getApplicationContext();
   CharSequence contentTitle = "My Notification" + String.valueOf(notification_id);
   CharSequence contentText = "Hello My Notification!" + String.valueOf(notification_id);
   //Intent notificationIntent = new Intent(AndroidStatusBarNotifications.this, AndroidStatusBarNotifications.class);
   Intent notificationIntent = new Intent(getBaseContext(), AndroidStatusBarNotifications.class);
   PendingIntent contentIntent = PendingIntent.getActivity(AndroidStatusBarNotifications.this, 0, notificationIntent, 0);
   notification.setLatestEventInfo(context, contentTitle, contentText, contentIntent);
   
   //Pass the Notification to the NotificationManager
   mNotificationManager.notify(notification_id, notification);
   
  }
}