Based on Deleting ALL products on Magento
Faster way (expecially if you have a lot of products) is the direct query
DELETE FROM `catalog_product_entity`
which is safe! as it is used even in the magento core:
https://github.com/OpenMage/magento-mirror/blob/magento-1.8/app/code/core/Mage/ImportExport/Model/Import/Entity/Product.php#L462
Remember:
building the “Category Products” index should fix the counts. Go to System > Index Management. Check the box next to “Category Products”, change the action (top right) to “Reindex” and click submit.
