I wonder if Blizzard reviews mass transfers from high level characters? Maybe that's why they targeted your lowbie. Anyway yeah, that sucks. Was your password fewer than 8 characters? Did it contain a dictionary word? Oh, and did you use it on any other important sites (banking, email, etc)? Make sure you change those, too, as well as the security questions.

Some links that might interest you:

XKCD, on password strength
Arstechnica, on being hacked

Hope you're back up and running soon.