I have a difficult time with the teleport spell.
Even if two of my characters are adjacent, trying to select the other character to teleport them results in the "target is blocked!" message.
I use teleport strictly as an offensive spell because (at least with enemies) after you move your target away from you he suffers a nice chunk of damage (many enemies are killed instantly upon re-materialization...;)) I've never tried it on a party member...;) Seems like it would do the same thing...!?