Hi. I need help...I'm the guy Jamey Aebersold told me not to be, I'm great at practicing but I feel stuck at playing. I study by myself because I can't afford a teacher...I know that's a major factor, but can you help me cut loose? How should I practice? Is it time to start transcribing a lot?

That's basically what you need to do. Transcribe and jam!

Transcribing is probably the single most important thing you can do with your hands off the bass. When you transcribe, you're internalizing notes and rhythms in a way that sticks with you. Makes your sight reading better, makes you understand written rhythms better, and it makes you taller and cuter ;)

Transcribing is a good all round learning tool, but get out and play. Even a Blues jam playing shuffles all night learning to play with others is invaluable and help you learn what to focus on in your practice.

Transcribing is probably the single most important thing you can do with your hands off the bass. When you transcribe, you're internalizing notes and rhythms in a way that sticks with you. Makes your sight reading better, makes you understand written rhythms better, and it makes you taller and cuter ;)

Great! I've always wanted to be a little taller and cuter :D

The hardest part for me is transcribing the chords. For instance, in a jazz tune usually the piano or the guitar is playing a lot of chords in a single bar but in a real book it only states Cmaj7 (for example). What are they doing? Chord substitutions and different voicings?

I agree with Doc too, start playing as soon as you can, even (especially?) if it is something "simple" like blues. I say simple, because harmonically (chords, etc.) it tends to be very straightforward, but it will push you in all the important ways - timing, feel, and thinking on your feet.

For transcribing, try to figure out the chord changes first, just by the roots, and write them down. It will make figuring out the notes a lot easier.

By transcribing do you mean to write down what you pick up by ear, or just learn songs by ear?
I'm not that good at writing music notation. Actually I'm not good at reading either. I can read...I just take forever to do so because it's not something I've practiced much. Takes me about a minute to read 2 bars! Apart from the reading and writing skills, do you think writing down what you transcribe is important to your playing?

Transcribing and then figuring out how those notes relate to the musical patterns that other people play (you know, the basics I, IV, V or I, iii, IV or whatever) really helps.

Bass players are in demand - every band needs/wants/must have one.

By transcribing do you mean to write down what you pick up by ear, or just learn songs by ear?
I'm not that good at writing music notation. Actually I'm not good at reading either. I can read...I just take forever to do so because it's not something I've practiced much. Takes me about a minute to read 2 bars! Apart from the reading and writing skills, do you think writing down what you transcribe is important to your playing?

It teaches me certain licks I might like to use, it gives me ideas on how to throw together chord progressions. It also teaches me different ways to interperet the same time and rythmn because each player will play a 6/8 or 4/4 differently.