Hi Tony,
No - don't delete it all; it's nearly all fine. You've just not yet got the webserver set up to funnel all the links into WordPress. Usually that happens automatically (if your webserver is Apache). You can also try logging into the dashboard, going to Settings -> Permalinks, and pressing 'Save' - but that possibly won't make a difference (since UD does the equivalent action automatically already).
How to get your webserver to do that is webserver-dependent - i.e. it's not something WordPress can always do automatically. You should ask your web hosting company, if you're not sure. It's always a very simple job, and then you'll be home + dry.
David
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