[quote=Joshua Tamashii]
I would say they evolve normally, just like they would in the show. I mean how many pokemon have evolved by trade in it?
[/quote]

According to Bulbapedia, exactly two. They both happened in the same episode.

It's worth noting that Pokemon have evolved by trading in the manga, too. But unlike the anime with its fancy trading machines, the manga only requires physically swapping Pokeballs. At one point, Red and Blue accidentally swap Pokeballs without noticing, and after a bit of training with Red, Blue's Machoke evolves into a Machamp.