I do the same as what most people on here it looks like and sell. I normally get a new phone once every 18 months and have no use for a second phone so I've always sold them, usually back to the manufacturer, this is where I find I get the best prices.
As long as it's not absolute junk, I'd probably find some other use for it, although I can't think of all too many off the bat. The second alternative as another user mentioned would be to give it to someone who needs a phone that doesn't exactly have to be super high end. I don't exactly use Apple products, but a iPhone 5 would be good enough to give to someone in need, but I don't see myself giving someone an iPhone 3 or anything like that. If it's absolutely useless (Ace IIx anyone?) then it goes in the trash.
I don't trade phones often, however, when I got the iPhone and was missing my Samsung I found a local charity for battered women and donated it to them. Great cause and feels good.
To acquire my new phone I sold my old one. I find it the best way to and have done it for awhile. If a phone I have is no longer working properly, or at all, I generally send to a company here that buys old unusable phones . I think these are the best ways to go right now.
