This only works on mice so far, but researchers have discovered that altering a specific protein in the brain can pinpoint and delete traumatic memories on a molecular level.
Neuroscientists led by Dr. Richard Huganir at Johns Hopkins University exposed some hapless mice to scary noises, and watched what was going on in their brains as the mice got conditioned to associate noise with fear. They found that one specific part of the brain, the amygdala, was the most active during this process. It's generally thought that the amygdala is responsible for forming memories that are connected with emotional events, and the researchers were able to determine that there's one particular protein in the nerve cells of the amygdala that helps to make that connection and establish the memory.
As it turns out, these proteins are uniquely unstable, and they can be targeted and removed from nerve cells. This weakens the connections in the brain created by the traumatic memory to such an extent that the memory is not just suppressed, but permanently erased. The proteins are most active about 24 hours after the event, and disappear within 48 hours, so this technique is probably only good for very recent memories, but at least on mice, it absolutely works.
Researchers say that they hope to be able to create a protein targeting drug that can help prevent the formation of traumatic memories, which seems like it would be a pretty handy thing to carry around. Have a bad experience? Take a pill, you won't remember! This is all very Eternal Sunshine of the Spotless Mind (except real), and when you have the ability to selectively delete bad memories, there's all kinds of potential for abuse. So, maybe it's a good thing that targeted memory erasure is only something that works on mice. For now.