What is a two bay NAS device?

A NAS is "Network Attached Storage".

The best way to describe it is, imagine a hard drive that is plugged straight in to the network so that any machine on the network can access it.

Standard ones usually have a selection of FTP, AFS, Samba/Windows shares and NFS (amongst others) as a method of accessing files.

Sometimes they also have various extra features built in to it, and (usually) the more you pay, the more you get. Some of these features can include a Bittorrent Client, iSCSI, Webserver and a streaming media server - again, the list can really go on.

Typically, a two bay NAS is simply one that has room for two hard drives and whilst they offer the same features to the end user who accesses the files, they usually come with built in RAID support so you can have disk redundancy / Mirroring (Raid 1) or make two drives appear to be one larger drive (Raid 0).

What Wil said; also, this is an example of what they look like :)