Here's some details on how it works:

Avatar:
-Health bar, this will only be updated if the player is in your viewed area and only when they get hit.
-Avatar, the equipped items will also only be updated when their appearance has been updated.
-Combat level: Same as above.

Mini-map will display party members in same colored circles as players avatar is displayed.

Unlock: You can toggle this to be able to move the party slots around your screen. Remember to lock it after you have found a good position.

Settings-> XP Notifications:
Toggling this off will disable the green xp pop ups

Settings-> Accept Shared XP
If you toggle a stat so it becomes green, you will accept and share experience for that skill.

XP Sharing:
You can only get shared XP for a skill if you have enabled sharing for that skill yourself,  in the picture above I would only receive attack XP and I would share attack XP I receive.
You only share and get shared experience for players in range, the party players you can see on the mini-map.