dxdiag will always report the highest version you have installed.
As long as you have updated your DirectX 9 files, you should be fine for TS2009 and later versions.
As you probably know, my DirectX update thread contains the information you need to update your DX9 files if needed.
Be aware that DirectX is a core part of Windows XP,Vista,and 7, and as such cannot be removed using standard methods, and I strongly do not recommend attempting to remove it using other methods, as you will then have to reinstall Windows.
Shane