I was wondering what sort of tool works best for removing traces on a stripboard like the following:
Image from http://commons.wikimedia.org
A knife with a sharp point can cut traces. Exacto knives are commonly used for this.
A rotary tool (e.g. Dremel) works well for this too. The advantage of a rotary tool is that it removes material and clearly separates the remaining parts of the cut trace. The disadvantage is that it produces metal shavings, which can land elsewhere and short something.
If I want to peel off a portion of a trace, I first cut it on both sides. Then I heat one end with a soldering iron. This causes the adhesive, which bonds the trace to the fiberglass, to soften. Then I can grab the trace with a pair of tweezers and peel it off.