jobroskie: (note ive been playing fallout 2 and this is only a gues) I think if you go to the arrow and hold either leftor right click it gives you a series of options. the bag one is use item from inventory. you might be able to use it from inventory on the ground to get rid of it (i dont think this sets timer)

Weclock: he is right, if you switch to the 'info mode' and hold down left click it will give you a menu, one of them looks like a hand dropping something. That's what you're aiming for.

mcfeher: The very first time I tried to use dynamite, I set the timer for 3 minutes because I was unsure of the blast radius. Also, my wife was nagging me to make sure I didn't blow myself up.
Well, I clicked the drop command and exited the inventory screen. Unfortunately, I immediately turned into Vault Dweller Mist. Apparently, I had suffered a Critical Failure of the Trap Skill when attempted to set the timer. Cue my rotting carcass in the desert. I still can't believe I blew myself up while my wife was looking over my shoulder.
Does anyone know if setting off explosives in Vault 15 will get you access to any goodies? It didn't work for me, but I thought maybe my skill was too low.

Weclock: Also, I can't believe you blew prematurely infront of your wife, it must have been embarassing.