This may be a bit extreme but on another forum I found info on how to completely wipe the dictionary, then if you keep a txt file with the custom words you use you can import that back in like bajie23 did.
Clearing the Swype Dictionary
"There is no way to clear, edit, or manipulate the swype user dictionary entry by entry. You can erase all your custom words and settings by going to Settings>Applications>Manage Applications>Swype>Clear Data
You will have to reconfigure swype's settings in Settings>Keyboard & Language>Swype Settings, but your user dictionary will be cleared."