Please, I need to know what should be done about somebody spreading rumors and harassing and saying really embarrassing things about another individual, what would you guys do? How to react properly? Some things people say can be really hurtful

Tell people they're lying.
Block them from myspace/facebook/etc.
Stay away form them.
Tell them to stay away from you.
Tell them to leave you alone.
Where are they spreading these rumors, and how? Of course, someone has to be in charge, so just tell them and let them deal with it.

How old are you? I'm guessing you're in high school... a teenager. Normally, adults don't bother with "rumors".
If so, then this would have been better posted in the teens board.

No, I am 18. First year in college and people have already began.

Hmm... close enough, eightTEEN.

Anyway, that doesn't change the answer. It shouldn't be that big of a deal. Just filter it out and ignore it, typical way to deal with drama.

If you really can't deal with it, go see your school counceler or someone on how to deal with such situations.
If it is starting to effect your preformance in school, go notify whoever is in charge of things like that for your campus.

Other than that, there isn't much you can do, other than keeping yourself separated from whoever is doing this, and keeping them away from you.

I am not sure of the "18" based on other posts, other responses, the spelling, the topics address.

Enough said.

Is this really about you or your niece?
If people are truly harassing you, you can take legal action and get a restraining order so that they have to leave you alone or they get arrested. But if its immature teasing and gossip, best to ignore it and avoid those people.