Well, first you have to be targetting the person you want to teleport to (through party or friend list), and you gotta make sure you're on the same channel as him/her.
So you can't just IT to anywhere, like majiin land, namek, etc?
You can IT to basically anywhere someone else is at that moment, just not to instanced zones, like if that person is in the middle of a TMQ or Karin's Tower.
As Kame said, you have to select someone from your friends list (click the name, it lights up slightly). Second, they have to be on the same channel as you. They also cannot be in TMQ and some dungeons (CC). Third, fire IT. Fourth... loading screen.
Like someone said you have to know the person to target it, which is friend List or party member. you cannot teleport other people even if is on party (only you), thats the only way know so far... Unless they chang it in TW version.
Fighter lvl 38 IT, can use on all characters, but must have it selected. Usully ppl IT guild or friend list people, because then they can select people in far places, but if ure near some player and select him, you can also IT him. Monsters and NPC are non-IT.