A two hole flange is one that when a vertical and horizontal centerline is drawn through the flange, two holes straddle the centerline. (the centerline goes between two holes). As opposed to a flange that when a vertical or horizontal centerline is drawn through the flange, the centerline would actually intersect one hole. Two hole is the most common way to install flanges.
Also, in continuance to what GRoberts said, you can use two hole pins to align the flange. The pins are made to fit different size holes (you can also get step pins). Place a level on top of the pins to level the flange to the pipe which is also leveled.
Chris
