Banner exchanges allow you - as a website owner - to exchange traffic with other website owners. There are many banner exchange networks that provide a free banner exchange program. The process to participate in one of this programs is like this: sign up, upload your banner, add HTML code on your website (on as many pages as you want), start receiving free traffic. So prerequisites are: your own website (because you need to be able to edit your pages), and a banner (.gif or .jpg file). There is plenty of help online for creating an attractive banner, try using a free web-based banner creation tool.
Most banner exchanges offer a 2:1 ratio, which means that for each two banners you show on your website (two impressions) your banner is displayed once on another website.
Usually banner exchanges don't provide a great click-thru rate. Even if you produce an awesome banner for every 1000 banner impressions only one to ten will generate a click. So traditional use of banner exchanges is not a great deal.
Here is secret you should know: Join banner exchanges which give you credit for other people who sign up in that exchange through your site. I personally am a member of 2 banner exchanges. They give me credit when someone signs up for their free service through my site. They are giving me credit for hits equal to 10% or even 20% of whoever's site I referred to them. In other words, when someone who gets 1,000 hits a day on their website joins through my banner on my webpage I will receive up to 100 impressions a day (considering 20% from referrals and 2:1 ratio)... That is extra banners that will shown for me automatically every day from now!
When I have 20 people joining a banner exchange through my site and each one of them averages 100 hits a day - This is 2000 total hits or 200 banner impressions for me. That is extra hits I will get every day automatically. These referrals can begin to build over time until you are getting a whole lot more credits from your referrals than you are getting from your own website.