"Baby Swap" or "Rider Switch" as it's officially known, is available only at attractions that have a height requirement. All of those attractions also have FastPass. What you will do is have the entire group approach the CM at the entrance of the attraction (the CM needs to confirm the child is under-height) and say, "We'd like to do a Rider Swap." The CM will give you a ticket that looks like a FastPass, but says, "Rider Switch Pass" on it, along with that day's date. Then, at least one person will have to stay behind with the under-height child - the child is not even allowed into the ride queue. The first group can ride with FastPasses if they have them, or they can ride stand-by. When they exit, the adult who stayed behind and up to 2 additional riders can go through the FastPass line with the Rider Switch Pass. The Switch Pass is good for the entire day so they don't have to ride right away.
The numerous times we have used "baby swap" I have taken the opportunity to take the child to the restroom or change his diaper, or get a snack or to do a favorite attraction nearby that he could ride (i.e., when Daddy and Brother were on Soarin', I'd take him to Living with the Land).
Hope this helps!