I just traded in a DS3 controller. The guy turned it on to make sure it worked, then pushed all the buttons, then swirled the sticks a bit. He also looked at the barcode on the back, not sure why though. Overall, he didn't do a great job of testing it, just went through the motions.
The last 4 times I have traded in a DS3, all they did was make sure the light on the top of the controller lighted up. But then again I traded in a 80gb PS3 on BF and they never hooked it up or anything.