I'd be glad to take care of this for you.
Canceling a domain means you completely give up ownership of the domain. There is no guarantee the domain will become available to re-register after cancellation.
You are welcome to keep your domain with us and update the name servers to point to another hosting provider by following this guide:
http://en.support.wordpress.com/domains/change-name-servers/
You may also transfer your domain to another registrar.
http://en.support.wordpress.com/domains/transfer-domain-registration/
If you would like to completely cancel your ownership of the domain name, please reply to confirm.
Once the domain has been cancelled, you'll be able to delete the site under Tools > Delete Blog.