Vengeful Spirit is a great support hero. She has a strong stun, good positioning capability, an oft-under-estimated teamfight and pushing AoE skill, and one of the best scaling auras in the game.
She is usually played as a 4th or 5th position support and has a strong early ganking/roaming presence.
Skills
Skill and max Magic Missile first.
Skill Wave of Terror second and get two early points, but thereafter max it last.
Skill Vengeance Aura last - at level 8 - but max it second.
Always get your ultimate, Nether Swap (levels 6, 11 and 16). Remember that you can swap allies to help save them.
Items
Starting Items: Courier and/or Observer Wards, a set of Tangos, Healing Salve, Ring of Protection, and an Iron Branch.
Early Game: Flying Courier, Observer Wards, Boots of Speed, Magic Wand, Ring of Basilius.
Core Items: Tranquil Boots or Arcane Boots or Power Treads, Mekanism.
Luxury Items: Force Staff, Medallion of Courage, Ring of Aquila, Vladmir's Offering, Drums of Endurance, Necronomicon, Ghost Scepter, Heaven's Halberd, Desolator.
Situational Items: Sentry Wards, Gem, Smoke of Deceit, Dust of Appearance.