Sapphiretiger,
When doing a Roth conversion, the earned income rule (requiring at a certain amount of earned income) for contributions does not apply. However, there is a separate income limit for Roth conversions in 2009, that requires you to have no more than $100,000 of modified Adjusted Gross Income (not including the Roth conversion amount itself). If you are not working and don't have significant sources of income, though, it sounds like you should be under this threshold and thus be eligible to convert. (Note: The $100,000 modified AGI limit itself will go away starting in 2010, so if you can't convert this year, you will unquestionably be able to convert next year.)

If you complete a conversion, you will be required to report the income amount from the conversion on your tax return this year, and will owe taxes accordingly. Given that you are not working this year, that's actually a pretty good deal - it means that the Roth conversion income may be some of the only income you have to report this year, which will keep the tax impact very low. However, you should be certain before you convert that you have other outside money available to pay the tax liability that will arise (in addition to emergency and other living funds that you may need to pay your expenses while you are not working).

It's also not a bad idea to try to convert earlier in the year, if possible. If the markets rebound from here, you'll have converted at a lower amount. If the markets go down further, you can do a "Roth recharacterization" and convert again later in the year at a lower amount.

For a great resource on Roth IRAs, the conversion rules, recharacterization rules, and other information, you should also check out: http://www.fairmark.com/rothira/

I hope that helps a little!