Well, I think that the first step in the solution is with the parents. My earliest memory of a lesson from my mother is her telling me, "If I ever catch you making fun of or looking down on someone because they're different, I will beat you until you p*ss." For some reason, that stuck with me.
My experience in school was that the teachers (and in Bible school, the pastor) turned a blind eye. I think that adults are actually afraid of the pack mentality that kids can have, and at some level, they are afraid that the pack will turn on them if they intervene.
In my school (a very small rural one) there were only three of us (that I know of) who intervened on behalf of kids who were bullied. One was Ruth, who was there only during 6th grade. She was the daughter of missionaries who were back from Africa for a year. Ruth was a person of character and principles, and she was also fearless. The second was Jann, who had the reputation of being "loose" because she wore makeup and dated out of ton high school boys while we were still in junior high. She didn't actively intervene, but did things like take Patty, the primary female victim, home to change into some of her own clothes when some of the girls pushed Patty into the shower fully clothed.
Looking back, I don't know why I wasn't subjected to bullying; I was the "smart" kid, my family was foreign, my clothes were homemade, and my mother didn't permit me to participate in extra curricular activities or to go to parties, etc. Honestly, I think that they were afraid to try anything with me, and the kids who were otherwise bullied and ridiculed were safe while they were with me.
I think it will take a combined, concerted effort by parents, schools and society at large to minimize bullying.