You activate this card during your turn. Later that turn, when you offer one of your monsters as a Tribute (for a Tribute Summon, for a Ritual Summon, for the effect of [Cannon Soldier] or any other effect that says "Tribute"), then instead of Tributing your own monster, you can Tribute your opponent's monster instead. Their monster gets sent to the Graveyard instead of the one you would have Tributed.
EXAMPLE
My opponent has [Kaiser Seahorse] on the field. I can activate [Soul Exchange], select his [Kaiser Seahorse] and offer that as a Tribute to Tribute Summon [Jinzo] (or a higher level LIGHT monster, because you can still use the effect of [Kaiser Seahorse] as considering it to be 2 Tributes for a Tribute Summon).
EXAMPLE
I have [Cannon Soldier] on the field. I can activate [Soul Exchange], select an opponent's monster and offer that as a Tribute for the effect of [Cannon Soldier].
Now, the one downside to this card is that you cannot conduct your Battle Phase during the turn you use this card. Also, if you've already conducted your Battle Phase this turn, you cannot then activate [Soul Exchange]. So don't try to be too sneaky about it. I mean, come on, getting rid of an opponent's monster for a stronger one of your own? Half the time it'd set you up for a Direct Attack, and that'd be too broken if you could attack with it in the same turn.
Please correct me if I'm wrong, but [Soul Exchange] creates a state similar to [Last Will]. You must activate it before the Tribute (/destruction), but you can use the effect of the card any time after the activation until the end of your same turn. But only once may you use its effect.
If so, I assume [Soul Exchange] would work with [Ectoplasmer]?
