I transferred my Roth from Scottrade to Vanguard because of Scottrade's new Vanguard transaction fees and because those are the only funds I use. Scottrade made me liquidate my funds before transferring them to Vanguard. I had four funds, resulting in a $68 (17*4) fee to Scottrade. Should I have been required to do that?

I don't see why. You're just changing the custodian of the Roth, that's all. Vanguard is now becoming the custodian. They are going to be the ones holding the Roth account.

The more I think about this, the stranger it gets. Did Scottrade send the cash proceeds from the sale of the funds to Vanguard? Did the funds then have to be re-purchased?

You're right to refer to this as a transfer. But I think the funds themselves should have been transferred, not cash. (And the cash was certainly not a contribution, right?)

Funny thing ... I've always had my Roth at Vanguard and I used to wish that I had it at Scottrade because Vanguard charged for the low balance in my Roth; they also had an additional fee for the low balance in a fund (I only had one fund, VFINX). So I got hit with two low balance fees until the account got sufficiently large. I can't remember exactly how the rules work, but it seems to me that if your four funds are sufficiently small, Vanguard may hit you with four low-balance fees--and then, if the overall Roth is too small, there's another fee on top of that.

--SirTas