Yes, when you delete a toon the name will be released to the public pool, anyone can take it.
However, there may be a slight delay. So if you create a toon to reserve a name, and then delete it to create you ACTUAL toon to play on that name... Then if you get an error that your name is taken, try waiting a while. I'm not sure how long that while can last, but shouldn't be more than a few minutes.
So wise. Thank you!