I noticed in more than one FAQ that is says you can't erase track records on the N64 version of Episode I Racer. I just bought the game used recently and I was fooling around with it and discovered that you can indeed reset the track records along with the stored data in the cartridge that keeps track of all the tracks, charactes, etc that you've unlocked.
1) Select Tournament, Free Play, or Time Attack at the main menu to get to the Player Select screen.
2) Delete every player you have stored at the Player Select screen by highlighting its name, pressing the C up arrow, then confirming the deletion.
3) Once every character slot says "EMPTY" you can erase all the rest of the cartridge stored data by selecting the "PRACTICE" slot, pressing the C up button, then confirming.