Trading Steam Wallet?

They buy prepaid cards.

You buy a card in a store, get a code, redeem the code and you get steam wallet.

USUALLY by trading for steam wallet, they mean 'store credit', as in buying something from the store to a value of X amount in trade.

Well.. I found this just now...

They could mean prepaid wallet giftcards as the others have pointed but that only works for larger and even amounts.

But you can use the Steam market to transfer money by selling something that has individual listings (for example TF2 or CS GO skins) way over value and having the other person buy it.
But keep in mind that you have to pay 15% market fee.

Trading using wallet means listing an item (usually a cs:go skin) on the market at a specific price, then give the link of that listing to the buyer. It's more convenient than csgo/tf2 keys for some people, and sometimes cheaper too, especially if you're buying expensive stuffs/games.

marketable items

You can sell some csgo items specificaly. Lets say you have a gun market worth 0.1$ and you agreed on a trade for 10$. Trader will buy that 0.1$ item from you for 10$+steam cuts. In the end you get 10$ steam wallet. :)

Maybe they mean they will trade something that is not listed on market atm for agreed price? That way you can actually transfer funds between wallets, with tip to Valve sadly.

i was trading before the hold, the steam wallet is a card that you buy in store like a pre paid credit card. you scratch the code behind the card then you send it to the other guy