Banked or borrowed points cannot be transferred. The transferred points must be from that member's current Use Year. But once transferred you may bank those transferred points if they are within the first 8 months of their UY ( although MS has been known to make exceptions to this and may allow the transferred points to be banked even if those points are beyond their banking window).
Concerning the transfer of same UY points into same UY -- I think MS allows for example, your friend's 2009 UY points to be transferred to your 2008 UY IF you use those transferred points for a reservation that will occur in your 2009 UY ( so in the example Chuck gave if your friend has March UY and is now is 2009 UY but you are still in 2008 UY you'd be allowed the transfer her 2009 UY points in but could not utilize the points for a reservation until Oct 1 2009 or later which then is YOUR 2009 UY )
Her points cannot be combined with your points if you have different Home Resorts until 7 month reservation window, but if your HRs are same you may be able to use the points at 11 months HR priority booking window - but afaik, if your UY is April and hers is June and she transfers to you on April 1 2009 (which begins your 2009 UY ) you may not use her June 2009 UY points for a reservation that occurs before June 1 2009 because that is when UY for those transferred points begins; but you could call MS on APril 1 to make the transfer and also for a reservation using both her BWV points transferred to you and your BWV points in order to utilize the HR 11 month booking window for a reservation that would begin on March 1 2010. So no, afaik, her June 2009 UY points cannot be used by you during APril and May 2009 for a reservation that is during those months even though your 2009 UY begins on April 1 2009.
Good luck