Along with satellites and space stations, Earth is surrounded by tens of millions of pieces of floating space debris. Like any landfill, the trash is diverse, ranging from dead satellites to castaway rocket parts to flecks of paint. On average, over the past 40 years, one piece of space junk has fallen to Earth every day.

Scientists at NASA and private companies have devised several ways for clearing the sky. Although some methods are admittedly outlandish, says Nicholas Johnson, the chief scientist for orbital debris at NASA’s Johnson Space Center in Houston, Texas, a few are possible with today’s technology.
One early idea was to have robotic trash collectors shove large pieces of junk through the atmosphere so that they mostly burn up before hitting the ground. But the fuel costs for destroying a significant amount of debris with such craft has quashed this approach.

Tether demonstrations have so far yielded limited success or failed outright, but despite the setbacks, Johnson and others are optimistic that the tech could be ready in a few years. Here, a look at how the tethers might make the sky safe for space travel.
Step 2 Interactions between the Earth’s magnetic field and the charged ionosphere create and drive an electrical current in the metal tether.
Step 3 The current generates a Lorentz force—a phenomenon that affects charged particles moving in magnetic fields—that opposes the spacecraft’s orbital motion.
Step 4 Over the next weeks or months, the Lorentz force pushes the craft to lower altitudes, until it mostly burns up in Earth’s atmosphere.

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You must admit, that is some pretty cool stuff!
JT
www.FireMe.To/udi
Thats a lot more technical than my idea of a giant space trashcan.
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CLEAN space from DANGEROUS debris and trash could be one of the BEST goals for a good COTS program...
unfortunately, the real (NASA funded) COTS are just a DUPLICATION of other (existing and future) ISS cargo and crew services, as explained in my "What's wrong in COTS" article:
http://www.ghostnasa.com/posts/020wrongcots.html
in this article, I also suggest of to do a better COTS program
.
post edit:
in this article, I also suggest... HOW ...to do a better COTS program
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Why don't they work out disposal before deployment?
from Geelong, Victoria
if someone was able to capture and recycle the junk, it would make feasibility less of a problem :P
Why not orbit magnetic wands that suck the debris out of orbit? Using large orbiting magnets makes more sense, and would cost far less!
I think this technology is great but Im still amazed why this wasn't addressed earlier, if NASA wanted to continue to grow they should have made this a priority. They cant continually send up large satellites, space stations, etc. without cleaning this up!!!
Some Soviet satellites used nuclear fuel to provide power for their satellites. One in particular returned to Earth spreading radioactive debris across Canada.
A safer alternative might be to attach robot boosters to these and other satellites to boost them into deep space or the sun.
Some old satellites might be able to be used to act like Shephard moons to catch debris as they travel around the planet. Debris colliding from behind might cause too much damage, but if a satellite were to "catch up" with the debris, velocities might be low enough to allow the debris to imbed itself without causing serious damage.
Future specially designed "shephard satellites" could use large panels in place of solar arrays to capture debris. Starting in a high orbit, orbital decay could be used to reduce altitude while debris is being collected. Once fully loaded the satellite could then be sent into deep space.
L.David Korkia