If you mean how do you evolve Porygon into Porygon 2, you give it the Up-Grade item and then trade it. But if you actually mean evolve Porygon 2, you can't; Porygon Z wasn't introduced until Generation IV.
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Porygon can evolve into Porygon 2, while holding an Upgrade and traded. Even further, Porygon 2 can evolve into Porygon Z, while holding a Dubious Disc and traded.
if you give it to a porygon 2 and then trade it it will evolve into a porygon z to get a porygon 2 you must give a upgrade to a porygon and then trade it and it shall evolve!
The Up-Grade is used to evolve a Porygon into Porygon2. In FireRed to get a Porygon, you must get 9999 coins at the Rocket Game corner and then exchange them for a Porygon. To get an Up-Grade, beat eight opponents in the Trainer Tower in Seven Island. At the roof-top, talk to the owner who will award you an Up-Grade. Also if you look in Rocket Hideout on island 5 you can find one.if you give it to your porygon and trade it, it will evolve into a porygon-2.
Porygon's level dosen't interfere with it's evolution, because Porygon does not evolve through Level Up. You need to trade a Porygon with another Pokemon game. Once the traded Porygon reaches the other game, it will evolve into Porygon-2.
In Pokemon Platinum, Porygon-2 can evolve into Porygon-Z using the Up-Grade. I do not believe it serves any other purposes.