It'd be easier to understand showing a pic of it, but
Switch-around is divided in three segments: Sketch, lineart, color(maybe background). The three people then each begin with seperate drawings by making three seperate sketches. Then, once they are done sketching they give the sketch/drawing to another person, so that they can do the lineart. Then once the lineart is finished you pass the drawing once again to the last person so that (s)he can do the coloring. Eventually you end up with three drawings with the three steps(sketching,lineart,coloring) in each drawing done by a different person.
You can also look it up on deviantart and you'll prob understand it right away.