Basically, an image is projected onto peel apart Polaroid film and before the image is fully developed you peel apart the film and place the negative onto a piece of paper or other receptive surface.
Here's the Polaroid site's tutorial.
Here is the site for the Queen of Transfers, Kathleen Carr
Here's the site for the machine you need to do transfers ( I have an old Vivitar, still available on eBay sometimes)
There was a great article in the Spring 2006 Cloth Paper Scissors magazine about transfers as well.
Here a few I did on Sunday. They have not been colored or embellished yet. The first one is actuallya double exposure, a sunflower and a little girl.