Author Pane is a helper module / theme function that can be used in a variety of ways:

CTools content pane:
If you have Page Manager (from CTools) installed, you can add the Author Pane content pane to any page variant. It requires the user context. There are two settings built into the content type: If Imagecache is installed, you can choose an Imagecache preset to use for the user picture. You can also use the "caller" field to give this instance a unique ID that can be accessed from the preprocess functions and the template file.

In Advanced Forum:
If you have Advanced Forum installed, it will make use of Author Pane automatically on forum posts. Advanced Forum provides its own Author Pane template so it can be styled specifically for use in the forums. You can set the Imagecache profile AP uses in the AF settings.

In Advanced Profile Kit:
Advanced Profile Kit includes the CTools content pane version of Author Pane already added to its variant. It pre-fills the "caller" field to "advanced_profile" so be sure to restore that if you remove AP from your variant and later re-add it. APK also includes an AP template but you must manually copy it to your theme.

Block:
There is an Author Pane block provided that you can enable. The block will show up on user/NN, blog/NN, and node/NN where the node type is one that you allow in the block config. It is automatically excluded from the edit version of those paths. If you want to exclude it from one of those page types, use the core block visibility option.

You can choose an imagecache preset to use for the user picture. You can also use the "caller" field to give this instance a unique ID that can be accessed from the preprocess functions and the template file.

Theme function:
You can call the theme function directly and print the author pane anywhere in your code. You must have a fully loaded user object to pass into $account in the function. The rest of the parameters are optional.

print theme('author_pane', $account, $caller, $picture_preset, $context, $disable_css); 

Parameters:
$account - The fully loaded user object. If all you have is a UID, you can get the object
with $account = user_load($uid); where $uid is a variable holding the user id.

$caller - (optional) This is an ID you can pass in as a way to track who is calling the
function. If you use Author Pane on your user profiles, on your blog pages, and in your
forums, you may want to display slightly different information in each Author Pane. By
passing in the caller, you can tell from within the preprocess functions where this is
going to be displayed.

$picture_preset - (optional) This is an imagecache picture preset that, if given, and
if imagecache is enabled, will be used to size the user picture on the author pane.

$context - (optional) This is usually a node or comment object and gives the context of
where the Author Pane has been placed so information from that context is available to
the template and preprocesses.

$disable_css - (optional) Because the Author Pane preprocess gets called after the code
that calls it, the Author Pane CSS file will be loaded last and clobber any earlier CSS.
This option tells Author Pane not to load its CSS so it uses the CSS of the caller. This
is mainly intended for Advanced Forum because the styles include Author Pane styling but
can be used for custom purposes as well.

Drupal 7 differences:
Printing a theme function is slightly different in Drupal 7.

  print theme('author_pane',
    array(
      'account' => $account,
      'caller' => NULL,
      'picture_preset' => 'thumbnail',
      'context' => NULL,
      'disable_css' => FALSE,
    )
  );