Interesting question: explain how the payments received by a fixed-rate payor can be estimated when valuing any interest rate swap agreement.

Int. Rate Swaps are hard. Review Fabozi.

I suppose its the idea of where you can forecast out Int Rates, and forecast them for the fixed-rate payor??

Fixed rate payor will be recieving floating. Floating payments can be estimated by using a floating rate bond as an example. The rate on the bond resets to the market rate at each payment date. Because it does so, the discount rate and the rate on the bond at any one payment date match. This will allow you to value the floating rate bond for the remainder of the time left on the swap.