I heard/ Read that this can be done and was wondering how to do it.  Anyone know? or is this false and can NOT be done? 

This can be done very easily!  You need to have an account at each site you want to transfer to/from.

• The Transfer credits link is under My Account in your PaperBackSwap, SwapaDVD and SwapaCD accounts. There is also a link under Kiosk at the top of any page on the three sites.

  Note: In order to transfer credits from your accounts,  you will have to have used your initial credits for the site you are transferring from. This is because the initial free credits we give are gifts to encourage members to try out the site. We do not intend for the startup credits to be used on our other sites.  And in order to transfer your initial free SwapaCD credit that you earn for posting 10 CDs to your account, you will need to deposit SwapaCD Money to your account.

• To transfer to SwapaDVD from SwapaCD or PaperBackSwap, you will need to have at least 3 credits in your SwapaCD or PaperBackSwap account.  The minimum number to transfer to SwapaDVD is 3 credits, which are transferred at a ratio of 2:3, which means that 3 SwapaCD or PaperBackSwap credits will convert to 2 credits if transferred to SwapaDVD.

   PBS credits will be transferred 1:1 to SwapaCD (1 PBS credit = 1 SwapaCD credit),  while PBS credits will be transferred 3:2 to SwapaDVD (3 PBS credits = 2 SwapaDVD credits, and vice versa). 

• Credit transfers between sites are permitted only between two accounts held by the same person. Transferring credits between two accounts on different sites links these accounts as "yours" and no other credit transfers will be permitted from or to any other accounts from these. 

So if you want to give someone else book credits from your SwapaCD account, you will need to transfer the credits between YOUR accounts on SwapaCD and PBS, and then make the transfer to the other person's PBS account from your PBS account.