The Block List was originally created as part of the PM system but liljim has updated it to be a sitewide feature. You can now access it via the Blocked Users link on your account options.
When you block a user, it defaults to blocking them in the following places:
Forums (their messages and threads collapse by default, you can click to expand)
Friend Requests
News (this is awaiting implementation to block them from blog lists)
Private Messages
Project Invites
From the Blocked Users page you can click the Pencil icon to manage your settings for individual users. For example, you can block someone from PMs but not block them on the forums.
If anyone has been on your nerves, give the updated block system a try! Let us know if you have any feedback / questions.