>>Depends what you mean by 'block' You can use the Fiddler 'Filter' tab to include/exclude specific URLS (e.g. 'Hide the following hosts' , 'Show only the following hosts' etc) but that is only excluding info on those hits from the Fiddler display - I don't think Fiddlers meant to act as a firewall and actually block HTTP traffic
>>
>I want to be able to actually block them. What should I do?

One quick and dirty way : redirect in the HOSTS file: e.g
127.0.0.1 www.google.com