Setting the recovery model to SIMPLE isn't going to help here. Regardless of the recovery model, a single statement has to be atomic (it works completely or not at all), so SQL Server is going to need space to log all of the deleted rows in case it has to roll back the statement.
A couple of options.
Split the delete down into smaller chunks. Lynne Pettis wrote an article a few days ago on this subject, which may help http://www.sqlservercentral.com/articles/T-SQL/67898/
It is sometimes quicker to write all the rows you want to keep to another table, then delete the original and rename the new one. This obviously isn't an option if you don't have exclusive access to the table.