Proper Trade Etiquette
(1) If you're interested in trading with another team, i.e., he has a player you want, you should make the first offer.
"Hey, I'm interested in Gary Sheffield, what do you want for him?" is not an offer. It doesn't give the Sheffield owner any idea whether he's wasting his time with you. So let him know what you'll pay for the player you want. He then will have a sense of whether you're serious. Let's say you offer Rick Porcello for Gary Sheffield - a ballpark offer in my opinion - the other team might turn it down, but once he sees you're being reasonable, he can determine whether to counter.
An objection I've heard to this is you don't know which player on your team another owner might want, so it's better to ask him. Not true. For starters, you can figure out what positions and categories the other owner needs by taking the time to assess his situation. If the Sheffield owner has a bad pitcher in one of his rotation slots, and needs wins, it's likely he'll take the Porcello offer seriously. Whether or not he likes Porcello is impossible to know. But you're giving him an useful option he didn't have and that could reasonably be believed to help his team.
Second, even if you got the other owner to tell you who he's interested in, that doesn't mean he's interested in any player you'd willingly part with for the one you want. So again, you're likely just wasting his time and yours. If a deal can possibly be made, then there's an offer to be made. Make it. Someone has to, and the burden is on the owner who is initiating the trade talks, not the other one who's minding his own business.
(2) If someone presents you with a reasonable offer, i.e., one that's close enough in value and also takes into account your situation, you should respond within a reasonable time.
A reasonable time, barring extraordinary circumstances - vacation, crunch time at work, etc., is 2-3 days.
Moreover, should you decide not to accept or counter, i.e., reject it, ideally you should give a quick explanation as to why. For example, if the Porcello owner offers you him for Sheffield, and you need wins, but just don't like rookie pitchers, you should say: "Thanks for the reasonable offer - just not high on Porcello, and not willing to pay what it takes to get A.J. Burnett." That way, the offering owner can quickly move on and target another team for a trade, but also knows that you appreciate his fair evaluations - and so he will be inclined to offer you trades should he see a potential fit in the future. Being presented with trade options is an unqualified positive in fantasy leagues. You want people to consider you a potential trade partner.
(3) Don't set out to rob someone.
Don't offer a deal that you would never consider accepting. By doing so, you're merely hoping the other owner is stupid, and even entertaining that possibility is an insult to him.
If someone offers you a deal that's patently unfair in your favor, it's a tougher call. On the one hand, you're trying to win the league, and you're not responsible for someone else's poor evaluations. On the other, if you win, you won't necessarily have earned your title, and a deal like that can ruin the morale of the entire league. If the deal is unfair in your favor by too much, you should turn it down. Where precisely to draw the line is hard to say, but there is one.
(4) How to respond when someone offers you a terrible deal
I know one owner who offers an even more absurd deal in return to make his point. You offer him Hank Blalock for C.C. Sabathia, he offers you Joakim Soria for Albert Pujols and B.J. Upton. That's a little snarky for my taste. Ideally, you reject the offer and say: "I'm not sure how that helps me at all." Educate the offerer gently without being too harsh. (I've been guilty of being too harsh many times, and it's hurt my trading prospects, so I've softened it up quite a bit). Or you can just quickly reject it. Snarkiness is poor etiquette, though an exception can be made if it's done with great wit. Unfortunately, most people vastly overestimate the wittiness of their snark, and even when it's up to par, the receiving party isn't always clever enough to appreciate it. It's usually better not to try.
(5) After consummating a deal, wish your trading partner luck even if you secretly hope the player you traded breaks his leg.
Making a trade in a competitive league is hard. If the trade is fair, both parties have taken a risk. That willingness to risk improves the quality and enjoyment of the league. Wishing your trade partner good luck acknowledges that spirit and is good for the league, even though you will never forgive yourself if the player you dealt outperforms the one you acquired.