First you soak the film for a certain time in the first bath which contains the actual developing agent. The emulsion is then saturated with the developer. The second bath, in which the film is then soaked for a certain time *w/o washing* (or you will have removed the developer again) contains the activator without which the developer will not do anything at all.(posted 8895 days ago)Two-bath developers are usually compensating developers, because there is only a limited amount of developing agent in the emulsion, and this is consumed faster in the highlights and slower in the shadows. They are also often very tolerant w/ respect to processing times for the same reason: If the film has been soaked for a sufficient time in the developer, leaving it in the activator a little longer is not so likely to do much harm as there is no developer in the highlights any more. One nice aspect of two-bath developers is also that films of different makes and types can usually be processed at very similar, or even identical times. The catch, however, is that (at least to my knowledge) use them for contrast control in the way you can use other developers, i.e. developing the film somewhat longer for enhanced contrast.
So far, I have only tested Emofin by Tetenal.