What's the best way of replacing a plug or switch in a house with aluminum wiring?
There are two ways to do it:


Use CO/ALR switches/receptacles: these are specifically designed for aluminum wire. They have "CO/ALR" stamped on them somewhere. When you connect the wire, use a paste like Noalox (box stores sell it). 
Use a pigtail connection: Sometimes it is not possible to find CO/ALR switches with the function or style you need. You can use a copper wire to connect to the switch itself as usual, and then a #63 wire connector to connect the copper wire to the aluminum one. Here is a picture of a 3-way dimmer switch I installed using this method:


(apologies for fuzzy picture) 

Note that you do the same thing with switches that have wires coming out of them already (like most dimmer switches do) or any other fixtures. 






To quote from the ESA (Ontario Electrical Safety Authority)'s Notice on Aluminum wiring in residential installations:


  Even though not required by the Code, it is
  recommended that bare ends of solid aluminum conductors be coated with approved joint compound.
  
  ...
  
  
  The Ontario Electrical Safety Code permits the installation of aluminum wiring.
  Adequate precautions shall be given to the terminations and splicing of aluminum conductors; 
  Aluminum wiring itself is safe if proper connections and terminations are made, without damaging
  the wire and devices approved for use with aluminum wire are employed.
  Aluminum wiring is widely used today for larger commercial and industrial feeders. Electrical distribution companies use it widely throughout their distribution systems including the supply service cable to most residences; in fact it may still be used today for interior wiring systems in
  residential homes as well as other structures. 
  
  
  ...
  
  Aluminum wiring itself is safe and if proper connections and terminations are made without damaging the wire and using approved materials installed in accordance with the Ontario Electrical Safety Code and the manufacturer’s instructions, there should be no problems with the aluminum wiring installation.




In either case:


Connect with #63 wire connectors.
Use the anti-oxidant paste on the wire and any other connections involving aluminum (apply to the wires before you screw on the connector). 
Use a wire brush to remove any oxidation before applying paste and making the connection