Flexchange is basically travel within 59 days where most restrictions that II puts on trades are lifted. As a result, a studio may pull (bring up on the website) a 2 bedroom if the 2 bedroom is available within the 59 day time period. It's a great way to maximize usage of your units. The downside is you have to travel in what some people would consider last minute, which may make it more difficult to find airfare.
Flexchange is also a great way to use your accomodation certificates (AC), which you receive when you deposit a desirable unit for trade. II gives you these certificates but they are highly restricted. If you wait until 59 days before travel, most travel restrictions are lifted for AC's as well. I got a Thanksgiving holiday week at Newport Coast Villas (which are 2 bds) in flexchange using an AC that I got for a 1 bd unit. Normally, my 1 bd would not pull up a 2 bd in II because of the like-for-like restrictions, but most rules are lifted during flexchange which resulted in getting a 2bd holiday week with an AC. I personally wait until flexchange for most of my trades since it fits my schedule. I just can't plan a year ahead.