Nut,
It all depends on the circumstance.
If they're a co-worker, then inform your boss if you feel uncomfortable about it.
A boss can very clearly tell that person that they smell and that person should be thankful. Think about it, it's worth a brief moment of embarrassment to solve a problem.
I've confronted people with this issue in the past, and it works out for the better every time.
If it's not work related, then stay away. If it's a girlfriend, then run. I mean, if their breath stinks, who wants to wander anywhere else?