I know for a fact they can be up'd once on NL I up'd something last night XD
I did read that they can only be up'd twice on ladder, but maybe I'll try on NL anyways out of curiosity
http://classic.battle.net/diablo2exp/items/cube.shtml
1 Lum Rune + 1 Pul Rune + 1 Perfect Emerald + Exceptional Unique Weapon = Elite Version of Weapon (Single Player, Ladder Only)
This formula changes the base item type from the exceptional to elite version. For example a Cleaver is turned into a Small Crescent. This does NOT convert the item to the Elite Unique version of the Exceptional Unique Item. Unique item bonuses remain the same; only the item it's based on is upgraded. This can be used to upgrade Ethereal Items also. They will continue to be Ethereal after they are upgraded. Also if the item is socketed, then jewels or runes and their mods will also remain.
Transmute Formula 1 Ko Rune + 1 Lem Rune + 1 Perfect Diamond + Exceptional Unique Armor = Elite Version of Armor (Single Player, Ladder Only)
This formula changes the base item type from the exceptional to elite version. For example Ghost Armor is turned into a Dusk Shroud. This does NOT convert the item to the Elite Unique version of the Unique Item. Unique item bonuses remain the same; only the item it's based on is upgraded. This can be used to upgrade Ethereal Items also. They will continue to be Ethereal after they are upgraded. Also if the item is socketed, then jewels or runes and their mods will also remain. Armor refers to any sort of armor, including helms, boots, belts, gloves and shields, not just body armor.