I have images in the Assets Catalog.
I added them by dragging images from the XCode project view (they are included in the project) into the Assets Catalog.
Once images are in the Catalog, can i delete them from the project itself?
Yes, you should be able to remove your images from the Xcode project view.
Once you drag them into the Asset Catalog, they're duplicated in the folder where the asset is stored. So you won't need them in the project view anymore.