Arduino and XBee Series1
There are two ways this could be tackled:


physically through connections between the xbee and arduino and read the xbee pins directly (I've never done this, and it comes down to your shield supporting it). Each of the desired output pins of the receiving xbee would be tied to a GPIO pin of the arduino. Alternatively,
serially using AT commands via the serial connection. 


I have never worked with series one, but essentially:


setup a serial connection to your arduino
send the desired AT command requesting the pins value
read the serial port response


Make sure to read the manual for the series 1 xbees for the right AT commands and in how to interpret the results. Register at digi and download the datasheet.

Also, just realise reading the xbee data is going to be different depending on how you have the xbee setup, ie API vs AT mode.

Here is someone who has done some work with series 1: http://www.johnhenryshammer.com/WOW2/pagesHowTo/xbeeSeries1.php#index

I'll leave the actual implementation to you since this sounds a little like a homework assignment. Give it a go using the second method above and see how you go. Then post back here (ie update the question) including source code and exact layout (schematic preferred) and we'll see where we can help you from there. 

Hint: google such terms as: "read data pins xbee arduino" (without the quotes).