When someone is Ignored, that person cannot communicate with you on that character. I use it for two situations:
- Whenever someone seems intent on harassing me.
- To support someone else who has been harassed or mistreated by a certain player.
Aside from wifely outrage, I've ignored a few people on my guild's blacklist, a basic list of gripes members have against certain players or guilds and the stories that accompany them (mostly alliance gankers, but some really horrible horde), including a guy who harassed our Valith for making server first DK to 80 and another guy who emoted in a bank about "politely raping" his friend. I was tempted to report that one, though I don't think his friend (the recipient) found it offensive. If it had been toward someone the guy didn't know, or even a woman, that would have been worth the time. All in all, the rest of my guild found it as disgusting as I did, and he's on our list of people not to group or do business with.
While ignoring someone is your personal "I don't want to talk to you" listing, Reporting is like bringing in the teacher to give detention. It's not done lightly and some people consider it a breach of player etiquette in any situation. Threatening to report gets people very very worked up.
A Game Master (GM) can be approached through a small red ? that opens up a ticket panel. If you have a technical issue, there's one sort of form to submit. If you have a behavioral/harassment or naming issue, there's another form. I tend to keep to the tame world of reporting yucky names.
Behavior you can report and punishment likely to result, summarized from Blizzard Support pages.
PLAYER-VS-PLAYER servers CANNOT expect help when reporting physical harassment such as corpse camping, killing lowbies, or tricking people into flagging for PVP, which are considered facets of PVP. (source) Normal servers can report these things.
ROLE-PLAYING servers CAN expect help when reporting RP-targeted harassment; out-of-character discussions in /say or /yell or other designated channels; or names that do not fit into the fantasy world of WoW. RP servers CANNOT expect help reporting out-of-character discussions in guild chat. (source)
- Penalties: Warning, warning + suspension, or new name + appropriate naming penalty (see below).
- Penalties: Prompted to change the name at login or get a random name assigned (lesser infractions). Name change + a warning (medium infractions). Name change + temporary suspension (serious infractions). Name change + suspension + Final Warning (extreme infractions).
- Penalties: Warning (mild to serious language infractions), temporary suspension (hate or serious language infractions), Final Warning (hate or extreme infractions), and/or real-life repercussions (severe threats of harm).
- Penalties: Warning, temporary suspension, and actions up to and including account closure.
- Penalties: Temporary suspension.
Please note that the only definite ways to get your account closed are to maliciously exploit the game or to recieve a Final Warning and continue being bad. Final Warnings are expanded on in the Harassment Policy: "any further ToU violations will result in account closure."
GMs take into account the intent of the infraction and the level of the infraction. Some things are just taken more seriously (and thus dealt with more harshly) than others. They don't slap the handcuffs on every single person who gets reported.
GMs don't really monitor your server -- the players have to police their own areas. It's like a classroom full of kids and the teacher is down the hall, and you have to run get her if something bad starts happening. GMs only respond to trouble when you report it, they don't watch for it.
GMs will still read and take care of your ticket if you log out. Try to include the information they'll need, such as the exact name, level, race, and class of the person you're reporting, along with a detailed explanation of what they did. I find that screenshots help me remember what I'm writing up (yesterday, a lovely fellow named Fucyoku; can you unscramble the secret message?). I specifically asked a GM when reporting a name once, "Do you still take care of the ticket if I log out?" and he said "Yes, we investigate every ticket submitted."
GMs can go into your chat logs and find the truth. Do NOT try to lie to a GM to make yourself look innocent or like a victim if you weren't. It is never a "he said, she said" decision where the GM takes a side. They will check. They can even check your guild chat logs.
This is good news for the innocent -- you never have to be afraid that someone can report you with false claims and get you in trouble. Just say "If you check the chat logs, you'll see he's lying." Also, if someone threatens to report you for something that isn't covered in Blizzard's policies, I wouldn't worry about it, it's just someone blowing smoke and trying to scare you. Report does not automatically equal punishment.
So don't be afraid to report people and don't be afraid to get reported (if you've been good). You won't get anyone kicked out of the game unless a) they've been really bad in the past and b) the GM thinks they're being naughty enough to warrant it. Penalties from Blizzard are not arbitrary, and you don't have to worry that you're ruining someone's life by calling in the teacher. In reality, and considering the kinds of things they have harsh penalties for, you're probably just making your server a better place.