The sender sends a character (which can be interpreted by the receiver as a command): serout somePin, N2400_4, (b4)
Most interactive programs (like the receiver) are in the form of a big loop which runs forever, doing stuff, or not, with each cycle of the loop and looking for input in one form or another to tell it to do other stuff.
The "bones" of the program I posted make a typical "do forever" loop:
Within the "do ... loop", you put your basic commands to do what you want the program to do. This can include checking input pins for on/off and lighting LEDs, and can also include checking to see if a command character has been received.
The "hserin" command for the M2 chips retreives a character from the hardware serial input buffer, and puts it somewhere that you designate, like into the variable b4. There may be nothing in the input buffer, in which case the previous value in b4 is unchanged. Therefor, to detect whether you have actually gotten a character from the buffer or not, you start by putting an invalid character in b4: "b4 = $ff". "$ff" is the representation, in hexadecimal, of the highest value a byte can hold (b4 is a byte-sized register)--255 (so you could also say "b4=255"). The value 255 does not represent an ascii character, like "0"-"9" or "A"-"Z", so it would not typically be a character which would be sent as a command.
If after you perform the "hserin b4" command, the value of b4 is still 255, then there was no character in the input buffer (no command had been sent by the other picaxe), so you continue processing your "do ... forever" loop. If the value is different, then you do other processing (like turning on/off an LED) based on the value of the command you received.
For instance, the first picaxe sending a "1" could mean you want to turn on an LED, and sending a "0" could mean you want to turn it off. Sending "A" could mean you want to position a servo at a specific spot, and "B" could mean a different spot (and so on). "Z" could mean you want to turn off all outputs and await further commands.