Receiving files requires no configuration. When someone wants to send a
file to you, you are asked (through yes-or-no-p) whether you want
to accept the file. If you answer yes, you get to choose where to save
the file.
If the sender's client is correctly configured (this is often not the case; see below), the file transfer will start. Currently, the only way to watch the progress is to inspect the buffer of the file being transfered; C-x C-b is one way of doing that. See Listing Existing Buffers (GNU Emacs Manual). When the transfer is done, the message “file downloaded” appears in the echo area, and the buffer is killed.
If this doesn't happen, it is most likely the sender's fault. The
sender needs to have a public IP address, either directly, through port
forwarding (in which case the client needs to be configured with the
real public IP address), or through an XEP-0065 proxy. If you have
activated XML logging (see Debug options), you can see the IP
address that the other client is asking you to connect to there. Often
you will find that this is an internal IP address (often starts with
192.168). See the documentation of the sender's client for
setting this up.