how to add a “next page” or “previous posts” on home page?

I thought I upgraded but if the bottom of the page in admin shows what version, I have 2.0.6. My problem is (besides being nontechnical and ignorant on all this) in my index.php there is nothing about previous posts to modify. So, I try adding this

<?php posts_nav_link(‘ | ‘, __(‘« Newer Entries’), __(‘Prior Entries »’); ?>

in the loop and out of the loop (I think) and nothing is happening. Theme is Pressrow. At one point I got buttons that did not actually link to the next page when you hit it. Just kept the same page. Looked nice, though. What I want is to browse after reading the initial posts, go to the next page of similiar number of posts. That’s all. That posts_nav_link stuff in the documentation did not help me.

I have previous post language if you are in archives or permalinks looking at a single page, so that is not the problem. I only just realized this feature was not automatic on my theme. How do I add it and where exactly? In more than one php file? If in the index.php, where exactly?