Subscribing to a Photo Stream in iPhoto 11
Edit: I failed to notice that the poster is on OS X 10.7.5, and Shared Photo Streams require OS X 10.8.2 or later. Therefore it will not work unless the OS is updated. I am leaving the below answer for others to reference.



The lower portion of the screen is the section under "Family and Friends' Photos". It's just lower than the "My Photos" section.

Assuming you're already subscribed to the other person's Photo Stream, you would just double-click on the shared stream to open it and view photos.



If nothing appears here for you, ensure that you have Photo Stream turned on in iCloud settings. Go to Applications > System Preferences and click on iCloud. Check the box for Photo Stream. Click the Options button and check box boxes on this screen.



To turn Photo Stream on, go to iPhoto menu > Preferences and click on the Photo Stream tab. Check all applicable boxes.