As human beings, we all want to be liked by the people who really matter to us and know that our efforts are appreciated. So, when someone puts us down, excludes us or reacts negatively to what we do, it taps into our individual insecurities and can really sting.
  
Here are some of my strategies for dealing with insults:

1. Don't look upset

I don't care if you're about to crumble into a little heap like an old-style vampire who has been out in the sun - never let them see you sweat. That's exactly what they want. If you don't look hurt, then their insults haven't worked. Just smile and look as though they said "good morning" to you. Don't act weak - they'll treat you like prey and continue to abuse you.

2. Don't retaliate

Confront the situation with humor. Instead of getting in their face, making threats or saying something you'll regret, just say, "Gosh, thank you so much. I'm really going to think about that because it might be very helpful to my life." It's called sarcasm, but if you sell it well, it seems sincere.

3. Listen

Even though they're being an ass, they may actually have some useful information you can use to improve yourself. 

4. Respond to the intent behind the insult, not the insult itself

Say something like, "Wow, what happened between us that made you want to hurt me?" That way, you're highlighting their intent to hurt you rather than addressing the insult. (It also doesn't hurt to have other people around when you say this because it will really make the insulter look and feel uncomfortable).

5. If you find out someone is talking about you behind your back...

Approach the person and say, "I just wanted to tell you that I'm worried about you because I think you are trusting the wrong people.  I've heard that you've been saying unpleasant things about me. I'm not upset about that - you're entitled to your opinion - I just wanted you to know that they are not protecting your privacy."  Be sure to use the word "they"; that way, you don't reveal who told you, and you make the gossiper feel paranoid about who he or she can trust. By making it seem like you're showing them great compassion, you're covertly addressing their insult and making them think twice before saying bad things about you or anyone else.

6. Walk away
 
The unfortunate truth is that some people won't give up. You should simply avoid them and keep them out of your life.