I have to answer your question with no.

But : you can move your posts that are in blog 1 easily.
Move the chapters that are in blog 1 to, lets say, blog 2 (or anything else you fancy)

How can you move chapters ?
open /conf/admin.php and change 2 things temporary :
look at line 29 and change the 1 to 3

 $allow_cross_posting = 3;

look at line 37 and change the false to true

$allow_moving_chapters = true;

than you are able to move chapters.
After that, change those lines back.

OK. Thanks. I made the changes in the admin.php file and can see how it will work: port the categories, then go back through the archive and cross post each entry.

Trouble is, I'm scared.

Are there any issues with this? Anything I should watch out for?

you don't have to crosspost
you just have to 'move' categories.
The posts will move too.

If you are scared (no reason too), you can do this :
make a new categorie in blog 1
make one demo post in that categorie.

make the changes in conf/_admin.php
move that categorie

control the status of your post and blog.

And you will see everything will be fine, and than you can move the other categories as well.

i made the changes and everything seems to work fine.

as you say, all i had to do was move the categories over, and all the posts followed, including comments, tackbacks etc. very painless.

as far as i can tell, the only thing that doesn't work as before is the RSS feed, which is blog-speciifc.