So Your Webmail Account Has Been Hacked
The following is what I tell most people in circumstances like these:
There are two basic ways that this fraud (a con-person sending email to everyone you know) may be perpetrated. Either they accessed your webmail account (Gmail, Yahoo, Hotmail, AOL, etc.) and are sending from there, or they harvested your address book while they had access of some kind and are sending to everyone on it from an account they control that is pretending to be you.
In the first case, a password change ought to fix the problem for now and help you get in the habit of using real passwords, i.e. eight digits including letters, numbers, and a special character which you change at least every six months or so. In the second case, the word needs to go out that all emails from you@provider.tld should be filtered for deletion, the archive of emails should be downloaded (if necessary) and the account canceled, and another email account should be created and its address published. In any case, one doesn't often know for sure how deep a miscreant has dug into your information, and it would make sense in the case of most private citizens to try the less intense remedy first and see if that eliminates the problem.