Everyone picks an element of a scrap page. usuaully, journalling squares, titles, tags, paper piecing, quotes, etc. Some stuff will have a size limit or number to make. Tags are usually 2 per person, squares, 4 per person etc...
Once it is decided on the number of people joining you would then make enough of one item to give to everyone.
So If I pick tags and I have 10 people in the swap I would make 10 of the same thing. Then you package it up send it to the swap host. Once the host has everything she bags it up and sends it out.
You enclose a self addressed envelope and either stamps or $2 for postage.
Then you will rec. a wonderful package with all the elements to create a layout.
Hope that explains it.