Never having played lax...can someone explain to me the "wheel substitution". Is it legal?

Bit of a guess hear never hear the term before:

Goggling it only told me it was a special substitution method and I could go to a camp for $45 to figure it out.

I think it is when a team uses the defensive half of the field to do the subbing in and then have a guy cross midfield and the sub enters the offensive half.

Whatever it is it is legal as long as the players leave and enter the field by rule.

It refers to a substitution method. Instead of one player running off and another running on to replace the player who ran off, depending on which way the "wheel is turning", Player 1 will cross midfield, Player 2 nearer the sideline will step off, Player 3 comes on to play the position Player 1 left. The wheel continues until all the subsitutions have been made.

What is the advantage gained by substituting this way? Does if freeze the defensive teams players?

It's quicker
 

If it's done right, it's quicker for a player to run to from the defensive restrainnig line to the midfield line, where a defender (usually a long pole) can then step off inot the box, and as soon as he does, a new middie can then run in from the box. It will cut 10 to 20 yards off the exchange this way. The player that just cam to the midfield line can then jog/run to the sideline and when he enters the box, the long pole can step back onto the field.

Another time you'll see an abreviated version of this is when a team is a man down. When the penalty expires, the player in the box will step on to the attack side, and a player standing at mid-field will then run straight back to even things up on the defensive side. As glbski said, it cuts down on the yardage, and it gets a player back into the play a couple of seconds quicker.