How do I show content based on relationship? There are two users A &amp; B. A is in "friends" type relation with B. Basically what i want to achieve with this is that i want to display blog posts made by B (or any friends of A) to A. 
Now the content should be displayed inside a block on user A's profile page. (Just like facebook wall where you get latest updates from friends). 

I know i can achieve this using Views but can anyone point me in correct direction?

User Relationships module is what i am presently using.
Create a new View with whatever fields, teasers that you want.
Click on the "Advanced" tab and that should open up a whole bunch of
sections.  You need the "Relationships" section. Click "Add". In the
popup find "User Relationships: Requester user" that's your key.  
Now you need to validate who that Requester is. You do it through
the Contextual Filters. Click "Add" and find "User Relationships:
Requester user", and inside it's options select "Current User". 
Now you need to filter content that is written by "friends of" the
current user. For that you need to add another relationship "User Relationships: Requestee user" which is a relationship of "User Relationships: Requester user" that you have already established. 
Under "Filter Criteria" click "Add" - find "node Author", and
in it's options choose "requestee".


These are the basic directions, you can play around with it under different combinations.