Knockout's observable arrays have a .remove(item)
function that does this for you. So you could add this to your view model:
removeUser : function ( user ) {
this.users.remove( user );
}
And then wire it up like this:
<ul data-bind="foreach: users">
<li>
<span data-bind="text: name"></span>
(<a href="#" data-bind="click: function () { $parent.removeUser( $data ); }">Remove</a>)
</li>
</ul>
<button data-bind="click: addUser">Add user</button>
Jsfiddle example: http://jsfiddle.net/8zR5u/