This is a complete AR-15 lower, depicted next to the mag lock kit (two small, round pieces at the bottom center area of the image).
In order to install the maglock, one must first position the magazine catch correctly.
Insert the magazine into the lower, and line up the small hole in the magazine with the hole in the side of the lower receiver. I've left the mag catch out in this picture so that you can see how it lines up.
The magazine installed, with the mag catch installed. Spring tension will serve to keep the magazine in place once you get it into place.
With the lower turned over on the other side, you'll want to insert the delrin spacer onto the mag catch where the spring on a normal magazine release would normally sit.
The spacer in place. Note that it sits flush with the surface of the lower, and the threaded end of the mag catch protrudes above the surface.
Threading the nut onto the mag catch. This is what actually keeps the magazine in place.
Tightening it down a bit with an allen key. If you use excessive force, you can actually crack the receiver here by putting too much force on the other side of the receiver. Optionally, you can use locktite to ensure that the screw doesn't get backed out.
-- SeanNewton - 03 Jun 2012