Even though I knew about Online Independent music distributor Magnatune, I was not aware that his founder John Buckman also started BookMooch or 'New Life for Old Books' as they describe themselves.
There are not many books I bought that I would trade personally but I could see that as a useful tool for parents.
Our kids get older and grow out of things they used to like and some of them are voracious readers so it is a good way to update their reading list.
The process for BookMooch is pretty simple: Register as a member, then make a list of books you want to give away, then receive requests for some of these books from other members, mail them and get points that you can use to get books from others.

Another site working along the same lines is PaperBackSwap which as its name suggests is focused on Paperbacks.
The process is pretty much the same as for BookMooch except that you need to list a minimum of 9 books to get started. Read their How Does it Work page for more details.
I discovered PaperBackSwap on Lifehacker.

Illustration credit Andrice Arp