OUTLINE: Patients receive fludarabine IV on days -6 to -2 and melphalan IV on days -3 and -2. Patients with a non-HLA-identical family member may also receive anti-thymocyte globulin on days -4 to -1. Patients undergo allogeneic or syngeneic bone marrow or peripheral blood stem cell transplantation on day 0. Patients receive graft-vs-host disease prophylaxis comprising mycophenolate mofetil twice daily beginning on day -3, methylprednisolone beginning on day 5 and continuing over 8 weeks, and cyclosporine IV or orally beginning on day -3 and continuing until at least 6 months post-transplantation.