We've reported on the "right click the spammer's name and report them" feature. Players had some additional questions, so the fine folks at WoW's European official site have created a Squelcher FAQ. They don't reveal their methods (that could give the spammers a way to get around it), but they do include some interesting facts about the new functionality that you may not have heard.
When you report someone as spamming, it not only blocks any further whispers or mail from that character, it blocks any further communication from any character on that account. And if that account gets reported a certain number of times, it will be prevented from communicating with anyone until the GMs can investigate the reports.
Also, there are some restrictions on using the "Report Spam" feature. You can only use it once every minute and only five times every 24 hours. And you can't use it on anyone on your friends list, in your guild or, duh, yourself. Other than that, lay down the report hammer on any unsolicited spam and get in line to buy a Blizzard employee a drink at BlizzCon 2007!