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The rock that the Clefairy throws in this strip is a moonstone.
It's shown that Pokemon can resist evolution, and some Pokemon can't even evolve under normal (if any) circumstances. This works well for several reasons: Red contrasts Blue and Green, Ash was originally going to have a Clefairy (and Pikachu has come into physical contact with at least one Thunderstone but refused to evolve), Clefairy have a 1-in-20 chance of holding a Moon Stone in the wild, and it would be funny (especially considering the way Red "found" the Moon Stone [getting clocked in the head with it] would fit well with the way Red "found" the Clefairy).
Red and Green will eventually battle.
Of course, Green, being the little cheater that she is, will have pumped up her entire party full of Rare Candies, which will put all of her Pokemon at a higher level than that of Red's Pokemon. Despite this, Red's Pokemon will still be stronger, even if they're at a lower level, because Green's Pokemon's stats would have no EVs to speak of. Green then begins to understand the importance of hard work, and undergoes some Character Development as a result, ending up being a better trainer for it.