One of the posters on the boards has a great link in her sig but I will give you our most recent experience from April 09. We will also be back next week using RS with my 4yo neice.
To use baby swap - also called "rider switch" you must have a member in your party who doesn't meet the height restriction.
Approach the line and inform the CM you want to use RS - he/she will need to see the child who dosen't meet the restriction so have your party together. The CM will hand the parent riding second a "rider switch pass" which works like a FP for that attraction and can be used anytime that day. Its good for up to 3 people to return and use via the FP line anytime that day.
Then the first parent and any accompanying riders can enter the line, standby or FP (if they have valid FP's) and ride. The parent ridiing second can take the baby/child to do something else and meet later. This can be a diaper change, nap or just a walk for a baby or and icecream, character greeting or favorite ride for a toddler/preschooler.
The exception is Star Tours and sometimes Primeval Whirl where the party riding second waits at the exit and then the parties switch.
Just ask the CM at the rides you want to experience and they will walk you through it. Its one of those things that's easy to use and hard to explain on a message board!!
TJ
What they said, including the "hard to explain on a message board part".
My wife and I used this for the first time this past June with our daughter, 7, and our son, 8 months at the time. It was GREAT!!!!
In most cases, as others have said, we walked up to a ride, say Splash Mountain. Found a CM, asked about baby swap\rider switch, and were given a ticket for it. The ticket was good for up to 3 people, and was basically an instant fast pass. It worked out great, as our daughter pretty much got to ride everything twice in a row. Once with me, then once with my wife, while one of us sat with our son, hung out, changed a diaper etc.
The CM's made it very simple, and it really is a straight forward procedure. I can see why it is not widely advertised though, as it seems like something that could be fairly easy to take advantage of, although if you don't have a little one, it would be a little difficult.