I have transferred characters over the accounts before, and I've just tried to do it again and I've received this message:
"The target Battle.net account has no valid World of Warcraft licenses to transfer to."
It may also be noted that the account I'm transferring on has been upgraded to Cataclysm, and the one that I'm moving it to hasn't (It's a WOTLK account).
The character I'm moving meets all of the prerequisites for a transfer. The character isn't at 80 or above.