you can block any twitter user that you like however note the following
there updates (and i think any tweets that mention them) are hidden from your timeline
to my knowledge it doesnt affect searches (at the moment)
other people can still follow them and see there content etc
you can report twitter users mostly for spam or impersonation issues via twitter support but its a bit of a long winded process for anything but spam - most twitter clients have a report spam button that auto blocks them too - if enough people do it in a certain amount of time the account usually gets taken down
offensive material is a harder subject on twitter - chances are nothing will get done about it in most cases but you can submit a support ticket to twitter if it offends you that much - chances are enough other people may have complained too