In QM a two state system (sometimes called a two-level system) is a system which can be in one of just wo states, and these states are separated by an energy barrier.
The most archetypical two-state system is a free electron which have either spin +1/2 or spin -1/2. This is the reason why you see two beams in a S-G experiment.
However, many systems can be MODELLED as two-state systems, e.g. an atom participating in a process where only two energy levels are involved.
Another example would be a quantum bit (qubit), which, by definition is a two-state system. Thi is why a qubit can be descibed using formalism that was originally developed to describe spin; even it the qubit is actually implemented using e.g. an electronic circuit..