Best Internet Variety Show (and Good Luck Getting Anything Done, Ever) in 2005! 
"Depending on your temperament and experience, one or more of four widely attempted common-sense solutions will occur to you: telling your child to stand up to the bully, telling your child to try to ignore and avoid the bully, taking matters into your own hands by calling the bully's parents or confronting the bully yourself, or asking your child's teacher to put a stop to it.
These responses share three features:
1) They all express genuine caring, concern, and good intentions.
2) You will feel better for taking action.
3) They are likely to be ineffective.
In order to understand why, let's focus on two aspects of bullying: It arises from a differential in power, and it's heavily contextual.
Context, not the individual attributes of bullies or their victims, is the key to prevention. Bullying between children happens in places where adults cannot easily detect it—in the halls, at recess, at the bus stop, waiting in lines. Adults typically do not know about such bullying unless there are flagrant and very frequent episodes or they happen to see it with their own eyes, which is relatively rare (teachers detect only about 4 percent of all incidents), since a competent bully chooses opportunities precisely to exploit a lack of adult supervision."
Apparently the only really effective solution mentioned in here is this one:
"When students see bullying, they tend not to report it. Surveys indicate that they usually believe nothing would be done if they did tell about what they saw. Bear in mind that about 85 percent of bullying happens in front of others, usually peers. The event is institutionally invisible, but there are typically witnesses. These peers intervene only about 10 percent to 20 percent of the time, but when they do, they can stop bullying. Even when the child who steps in is considered weak in the group's hierarchy of power, the bullying stops within 10 seconds in more than half the instances of intervention by peers. The extensive body of research on bullying has led to a new appreciation of the power of bystanders to enable or disable bullying."
