Here's How You Do It (another set of instructions)
1. Apple says that you should unplug all other FireWire devices from both computers. TDM works whether you do this or not but there may be a "hidden" technical reason so I advise doing as Apple says and disconnecting all FireWire devices before initiating TDM.
2. Make sure that the Target Mac (COMPUTER #2) is turned off. (The Host (COMPUTER #1) doesn't need to be turned off.)
3. Use your FireWire (6-pin to 6-pin) cable and connect the two Macs.
4. Start up the Target Mac (COMPUTER #2), while you hold down the "t" key. You can release the t as soon as the FireWire icon appears. The screen will be a solid color -- blue, green or gray -- and the FireWire icon will be the only thing visible. It's a little scary the first time; but what isn't? The FW icon sort of bounces around the screen but don't worry, this is normal. The hard drive of the Target Mac (COMPUTER #2), should appear on the desktop of the Host Mac. If it doesn't, restart the Host (COMPUTER #1) and it will show up.
5. Now that the Target Mac's (COMPUTER #2), drive is "in" the Host Mac (COMPUTER #1) you can put whatever you need to transfer into the new folder you've created there. Either click and drag to copy it or create and save it there. If you're transferring a FCP movie and it's over 15 minutes long have lunch or something because even though it's a lot faster than ethernet it'll still take a while to copy.
6. When you are finished copying files, drag the Target Mac's (COMPUTER #2), HD icon to the Host Mac's (COMPUTER #1) Trash or select "Put Away" from the OS 9 File menu or "Eject" from the OS X File menu. Very important; Don't forget this step because if you simply leave TDM (by turning off the Target Mac (COMPUTER #2)) before doing it you can lose files.
7. Here's a step that gave me pause but when you think about it, it's the only available method: Use the Target Mac's (COMPUTER #2), power button to turn it off. See, there's no desktop or toolbar, just the colored screen with the FireWire icon so the power button is the only way.
8. Unplug the 6 to 6 FireWire cable from both Macs.
Now you're back to normal so plug in all the FireWires for both Macs back where they belong during regular operation and you're done with the transfer.