A couple things to think on for those of you with opinions:
No change in xp on trade out (I trade a 4th level character for an ecl 4 character)
Static change in xp on trade out (-1 level throughout all levels)
Linear change in xp on trade out (1/2 or 3/4 character level trade out)
Dynamic change in xp on trade out (explained below)
Dynamic change would be something like "I trade out a PC race character for another PC race character with level change x" OR "I trade out a PC race character for a 'easy' monster as race character such as a Goblin, Kobold, Orc, or Drow at a x-1 adjustment" OR "I trade out a PC race character for a 'difficult' monster as race character such as a Lycanthrope, Yuan-ti, or Kuo-toa at an x-2 adjustment" OR "trade out for a 'very difficult' monster as race character such as a Vampire, Hill Giant, or Ogre Mage at a x-3 adjustment."
I'd be in favor of a more dynamic trade out system over a linear or static change, and I wouldn't support an equal level trade out at all.