First off I love these creatures, they are beautiful and usually quite harmless. The also wiped out a colony of tent catipillars in about 2 weeks.

But a few of these dudes have decided to make a home under my umbrella which shades my outdoor table. I'm having a party this weekend with some kids and such and I don't want any problems. Should I just knock down the nest and let them relocate or what?

When the nest is this small, that's probably the best approach. Spray the nest with water and after the wasps fall, pull the nest off. If it isn't injured, it can be relocated and attached with a pin or small nail. May be too much trouble in this case. Be careful and don't get stung. If you are successful, send us some photos. If you have to kill the nest, the paper wasps will rebuild right away - that's their job.