I don't know when you cross the line between picking on someone and bullying, but I know I was picked on. I also know that I picked on other kids from time to time. I always figured it was pretty much the same for everyone. I used to side with the "pussification of America" crowd on this until I learned a little more about internet-based bullying.
Aside from PIing and being PIed, which is pretty light hearted I've never experienced it on either side, but I tend to think that it is a lot more severe and can easily be far more emotionally-damaging to kids.
It is hard to apply taking a stand when you are a kid and 20-30 people on the internet are constantly calling you fat, homo, etc. on the internet with no remorse. The remorse factor is a big part of it. I know if I picked on someone when I was younger and I started to see them become emotionally hurt, it would trigger sympathetic and empathetic feelings in me, which usually ended in an apology and being friendly later. With the internet that doesn't occur.