What happens when you report a member?
We investigate them thoroughly :) If they are repeat offenders, we delete their account. If they are newer members, then we give them "one freebie" and explain to them when they signed up, they agreed to our terms of service, and that they need to abide by those.
However, if you report somebody for no reason, eg, frivolously, then we'll potentially ban your account if you do it repeatedly, because we take all reports very seriously, and frivolous reporting wastes time we could use to answer questions, improve the site, and add new features :)
At some point, we may start automating parts of the process, but it'll always have a human component.
It sends to an admin and they look it over - if its something that needs to be dealt with the admin will have a talk with the person being reported. If its something serious enough, the user may be removed from the site.