401K to Roth IRA conversion - Penalty and tax implications?

I am 39 years old and filing taxes as married jointly. My wages were 60K in 2009 due to unemployment. My AGI will be about 100K from now onwards. Is this a good opportunity to convert my 401K from previous employer into Roth IRA as I will be in lower tax bracket? Will there be any penalties as the conversion is from before-tax to after-tax contribution?