The Replace operator means Replace something with something else; do not be confused with removal functionality.
Also you should send the result processed by the operator to a variable or to another operator. Neither .Replace(), nor -replace modifies the original variable.
To remove all spaces, use ‘Replace any space symbol with empty string‘
$string = $string -replace '\s',''
To remove all spaces at the beginning and end of the line, and replace all double-and-more-spaces or tab symbols to spacebar symbol, use
$string = $string -replace '(^\s+|\s+$)','' -replace '\s+',' '
or the more native System.String method
$string = $string.Trim()
Regexp is preferred, because ' ' means only ‘spacebar’ symbol, and '\s' means ‘spacebar, tab and other space symbols’. Note that $string.Replace() does ‘Normal’ replace, and $string -replace does RegEx replace, which is more heavy but more functional.
Note that RegEx have some special symbols like dot (.), braces ([]()), slashes (\), hats (^), mathematical signs (+-) or dollar signs ($) that need do be escaped. ( 'my.space.com' -replace '\.','-' => 'my-space-com'. A dollar sign with a number (ex $1) must be used on a right part with care
'2033' -replace '(\d+)',$( 'Data: $1')
Data: 2033
UPDATE: You can also use $str = $str.Trim(), along with TrimEnd() and TrimStart(). Read more at System.String MSDN page.