You are asking about the "move-up" credit, rather than the "first time homebuyer", correct? The last repondant was correct that you should verify with a tax preparer/accountant and your attorney for your particular case, but the general guideline is that you must have owed your former property or properties for 5 of the last 8 years. (If you are filing jointly and one of you owned a property for less than 5 of the last 8 years that was sold, you may not qualify. Check with your financial advisor.) Your income as a couple cannot exceed $225,000, and as a single, $150,000. The maximum price on the new residence, however, can be upwards of $800,000 (I can't remember the EXACT figure on the home price - A little help, fellow REALTORS?). Please remember that the $6500 figure is the upper limit of your potential credit. Depending on income, cost of the property, etc., you may qualify for less.
Just to brag about my fellow professionals a bit here - The National Association of Realtors was highly instrumental in getting information on the effectiveness of the tax credit to our lawmakers. In very high numbers, we individual REALTORS contacted our legislators. We strongly pushed for the extension of the first time homebuyer credit and the expansion of the credit to benefit move up buyers. As of last May, Capital Hill was VERY reluctant to even consider extending the credit because they didn't see the value in it. We made sure they knew it was working - and why.