Yes, as they are both commanders and Rex costs less than Vader, this is assuming you don't have Rex in the base squad.

I'd also lean towards "no" because the way I see the CE you choose the new character after you've removed the old character. Thus, Rex would no longer be able to benefit from Affinity since there is no Affinity anymore. Of course, others could see it a completely different way so there's a chance I could be wrong =o/

If you had Vader and 501st Rex in the base squad, you could swap out Vader for another commander, but you wouldn't be able to swap them for each other because as soon as Vader is removed his Affinity is gone. They have to at least exist in the squad together for a brief period of time.

Since it says the new character is placed where the old character used to be, I see at is:
Step 1: Remove old character
Step 2: Choose new character of equal or lesser cost
Step 3: Place new character in old character's spot

This was discussed with the notion of setting up Palpatine on Throne in Gambit and then switching him for Arica, giving her a head start on being able to attack your opponent's squad faster.

And Demosthenes is correct that Vader and Rex can be in the squad and Rex would still be legal if you switch out Vader. That's similar to how you can use Palpatine SL and Captain Rex then remove Palpatine SL for another character and it's legal.

Yep, you can. What's the confusion? Weeks was asking if you could switch out a character with Affinity for a character who could only be in a squad with that Affinity, which was decided couldn't be done. The situation you propose is exactly what Pellaeon's CE is designed to do.

The post swrogue quoted was me voicing my thoughts and concerns. Either answer brought into issues that I had to think. As I have often stated on this forum, the REASON is just as important as the result of an answer.

If I go with Yes, how does it work. It means the removed piece is still considered part of the squad, as there are multiple precedents that points to that certain ablities still affect situations on the board, even if the fig is defeated. See Black Sun/Xizor & Vigo and the Unique/Reserves rulings for better understanding on how this answer would pretty much kill the CE.

If I go with No, why is it no? The above rulings would have to not take effect, thus the figure replaced is no longer part of the squad. If the Imperials get something similar to Black Sun, this will be something to consider. And quite honestly, the timing of the CE makes it a bit weird to say that the replaced character is not part of your squad. Fairly minor, but something to think about it.

Anyway, I thought about it, and my ruling is no, you cannot replace Vader, SA with a 501st character, because the replacement effectively removes the character for all purposes, so Affinity would no longer be applicable.

And I will bookmark this this thread the next someone complains when I say that the reasoning is just as important as the final answer.

Apparently you've never played with Jar Jar, a transport, or a Diplomat.