Keep it simple and fun. Invite your friends over and have everyone put their items in a pile. You can set a limit or a minimum on the amount of items everyone should bring to the event. Then, each person takes a turn going to the pile and picking out something to take home. You can pick out something for yourself or for someone else.
Make sure and take pictures to capture the fun. If it is kids involved in the clothing swap, set up a mini runway for them. The adults can snap the pictures. Not only is this a great way to recycle old items, it also helps you clean out your closet. Any left-over items can be donated to a thrift store at the end.