This article covers how to set related product relations in Magento.
First navigate to Catalog→Manage Products, and select the product to edit, and navigate to "Related Products" on the left.
In the related products tab, there'll be a screen similar to the following image. On the far left, the search defaults to "Yes" which will only show products that are already related. Select "No" or "Any" and click search.
Now select any other products that you want to make related to this one. Then save your changes.
Making "Product A" related to "Product B" does not make "Product B" related to "Product A".
In order to make 2 products both related to one another, both must be edited separately.