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In essence, this rule allows you to do a rollover from a Coverdell account to a 529 plan, but with a different time limitation. When you move money from a Coverdell account to a 529 plan, you have to complete the transfer within the same calendar year, which may allow you more than 60 days — or less, if the money comes out near the end of the year."
http://fairmark.com/college/saving/coverdell/moving.htm
Important: One of the last interview screens is "Distribution Transfer - Did you roll over or transfer all or part of this distribution within 60 days to another Coverdell ESA?" The correct answer is "No" and this will trigger tax on the earnings component, however, if your child is not yet a college student you won't be able to enter the distribution as a "qualified education expense" (the right answer but you won't get to the interview). The only work-around I have found is to just answer "Yes" when it asks "Did you roll over or transfer all or part of this distribution within 60 days to another Coverdell ESA?"
Another important step though not on your return - For transfers from a Coverdell Education Savings Account, provide the 529 plan with an account statement issued by the financial institution that acted as trustee or custodian showing contributions and earnings (or losses) in the account. Supplying this information to the 529 plan is critical. If the plan does not receive this breakdown between basis and gain/(loss), it will account the transfer as consisting entirely of earnings which are subject to income tax and a 10% additional tax if later withdrawn as a non-qualifying withdrawal from the 529 plan.