A two-stage heating system means that a furnace has two levels of heat output. There are both; high for cold winter days and low for milder days. Having a two-stage means that the furnaces will start in the first stage, and will not reach full capacity all at once. Because of this, you will not see a sudden blast of air. When in the low setting, it will meet the household heating demands 80% of the time, allowing a two-stage unit to run for longer periods and provide more even distribution of heated air.