Here's the thing, you can report them-- but that's not going to stop them from signing up again and lying again. They don't have to pay to use it, the measures to check age are non-existent. I think what's most important is making sure your daughter and her friends are savvy about internet use.
If you watch the PBS Frontline show "Growing up Online" (you can watch it online, and i HIGHLY recommend it), there are many experts out there who agree that our kids-- these "digital natives," are actually very good at weeding out creepy people. They also discovered in their research that many of the "sexual" solicitations that kids received were not from pedophiles, but from people they knew who happened to be a certain age range older (2-3 years, so think of it as a 16 year old girl hearing something suggestive from an 18 year old boy). Of course there still are sexual predators out there, just like there are when your children are walking through the mall!
The other reason kids lie about their age on myspace is because it gives them more access to the site.
We are in the midst of a digital/cultral generation gap. Our kids are growing up with virtual 24/7 access to the internet/social networking-- it's our job to make sure they act responsibly when they are online, as well as offline. If you are concerned about the parents of these kids, and the kids--it may be best to forbid your daughter to hang out with them period.