The Exchange Item was for Pegasus Account owners but recently moved to an "All Player" feature allowing Non-Pegasus Account owners using this feature as well. But the only advantage Pegasus Account owners have is they up to 3 item exchanges a week and Non-Pegasus Account owners only have 1 a week.
This place allow players to trade items they have for newer items or even buy items with your equus. For Non-Pegasus Account owners, they can exchange 1 item a week so use this exchange wisely, for Pegasus Account owners, they have up to 3 exchange for 1 week, even though they have 3, they must still be careful on what they trade, 3 may be a lot, but once you start to use it, they go by quick.
On special occasions, Howrse may give an extended time for Pegasus Account owners or even a free Pegasus Account membership to some players for winning a contest or something. Howrse also may give players more then 3 exchanges for 1 week for special occasions such as the week of March 7th, 2011. Due to the Sleipnir in the Horn of Plenty event, Howrse allowed players having 10 exchanges for 1 week letting you exchange items you may have received from Horn of Plenties.