An exchange-type diet is a meal plan with a set number of servings from each of several food groups. Within each group, foods are about equal in calories and can be interchanged as you wish.
For example, the "starch" category could include one slice of bread or 1/2 cup of oatmeal.
If your meal plan calls for two starch choices at breakfast, you could choose to eat two slices of bread, or one slice of bread and 1/2 cup of oatmeal.
The advantage of exchange-type diet plans, is that it teaches you normally good food selection skills, enabling you to eat a combination of foods so that you have a greater variety.
This sort of diet plan is suitable if you find that food restrictions are difficult.
The negative side is that weight loss can be very slow if at all, plus the measuring of the meals can be difficult for some people, (what is a cup measurement?).
It is due to these problems that I personally would not recommend this form of dieting.