Is cyber bulling illegal?

Obviously calling people names or targeting people with malicious attacks in Yahoo Knowledge can never be a criminal offence.

You have to bear in mind that any such criminal offence will engage the freedom of expression. The government would be ill-advised to criminalize such conduct since I am pretty sure it would not survive a constitutional challenge and the courts are very likely to strike it down.

Although the one targeted may feel unhappy, that's pretty much all the harm caused....would it be in the interest of justice if someone gets a criminal conviction and a criminal record just for calling people names?

In fact, the Court of Final Appeal recognized that, "[The freedom of expression] includes the freedom to express the ideas which the majority may find disagreeable or offensive..." The court also noted that content-based restrictions are prima facie unconstitutional.

I don't think any countries have legislated against cyber bullying. Any state doing so would be described as a "nanny state", which trespasses into the basic rights of citizens even though the act in question causes little harm.

On the other hand, there may be a civil remedy in defamation. However, most cases of calling people names or targeting someone with malicious attacks would not constitute defamation as defamation refers to the damage of one's reputation when someone makes a remark that "would lower the plaintiff in the estimation of right-thinking members of society." It's not concerned with the feeling of someone but the reputation. Calling you names is unlikely to make others look down upon you.

If the malicious comments in fact causes you medically-recognized psychological diseases, you may have a civil action in the obsolete doctrine of Wilkinson v Downton or in negligence. Otherwise, there won't be any civil remedies for the one being bullied.

How can "calling people names", "targeting someone with malicious attacks in Yahoo Knowledge" a criminal offense?

It's civil at best.