AT&T Apple IPhone IOS 4
Technically, you can not block calls on your iPhone. If you want to block a caller, you have to contact your carrier.

Some phones enable call rejection but, alas, the iPhone is not one that does. Note that call rejection means the call still reaches your phone, but software in the phone prevents notification of the call from reaching you. Call blocking means that the call never reaches your phone, it is cut off by the carrier and never routed to your phone.

However, if you want to make it a little bit easier to ignore the offending caller, you could set up a contact for the caller's number, set the ringtone to a silent ringtone, vibration to Nothing, the text tone to None and the text vibration to Nothing. You'll still see notifications when the caller tries to reach you, but this is the best that you can do without contacting your carrier.