This past weekend I was basically "told on" at work for something that I didn't do.  My boss was really upset at me and didn't even believe what I had to say and even at that . . . he barely listened without cutting me off.  The person who told on me has a friendship outside of work with the boss.  I feel frustrated and it's not fair.  It's starting to effect my days off and school.  Should I quit?  I can easily find a job somewhere else, but, I love what I do.

This sounds like a tough situation.  I would encourage you to look at all of your choices. 

#1  You may want to confront your co-worker about this situation.

#2  You could ask for a meeting with your boss and your co-worker to discuss your concerns.

#3  Does your boss have a manager you could talk to about this situation?

#4  You've discovered that live isn't "fair".  You will encounter this throughout your lifetime.  You can now choose to stay in this uncomfortable work situation knowing what you now know about the
      the employee dynamics, or you may choose to leave.  These hard situations compel us to take care of ourselves, as you have found, stress can definitely affect all aspects of your life.

I hope this helps clarify what you'd like differently, and some of your options.