Yes, a very basic but effective way to kick someone's ass. There is a bit more to tele-meleeing though. Advanced tele melee-ers tele, hit you, and then tele once more to hit you before you have even stopped yourself from flying away. Tele-melee was a lot more effective in 1.1 as you were able to tele as fast as you wanted via the scroller on the mouse (good 'ol days). It was also necessary in 1.1 because all you did was swoop and hit. Teleport would be used to link hits together in order to create combos (the max i ever did was 5...im on 56k so i never dared to try more).
In 1.2, basically the most effective tele hit combo is hit, tele, and hit again. I guess someone will eventually be able to do that and then tele above/below the person and hit them once more. Kinda hard but time will tell.