Well first, there were at one point more than two Sith. The term "Sith" is generally generalized to mean all practitioners of the "Dark Side" of the Force. In the Second Great Schism (7000 years prior to the events of the Star Wars movies), a small force of Jedis discovered new Force abilities, which they attained through more "passionate" use of the Force. These practitioners were condemned as "Dark Jedi", and in their exile discovered a sentient race called the Sith, whose philosophy centered on conflict as the primary driving force of advancement. The Dark Jedi came to rule over this race through their mastery of the Force, and eventually interbred with them to produce sentient Force-sensitives which had an innate desire for conflict; the Sith Lords.
The Sith Order was established to train disciples in this new philosophy; ancestry eventually fell by the wayside as the Sith sought to train as many Force-sensitives as they could amass. Unlike the Jedi Order which taught that anger, fear and pain were negative and to be driven from one's mind, the Sith taught Force-sensitive pupils that these emotions were natural, and to be harnessed in order to fully master the Force. Even the Sith believed that control of these emotions was necessary; only the weak let these emotions completely rule their actions. For about 6,000 years, there were dozens or even hundreds of Sith, and many Sith Masters (roughly equivalent to Jedi Masters; there was one leader of the Sith, but any Master was the equivalent of any other Master).
The Sith as a large Order were destroyed with the coming of the Sith'ari; a Sith "overlord" who epitomized the teachings of the Sith and became free from all restrictions on the power of the Force. The prophesy stated that this being would rule the Sith, but also destroy and remake it. This came to pass around 1000BBY with the rise of Bane, who was the first to take the title Darth after it was banned by the Sith Order, and who first instituted the "Rule of Two"; If there is only one Sith Lord, the line, and all the knowledge and power of the Sith, rests in one person; kill him and the Sith are extinct. However, if there are more than two, the most powerful among them - the Master - will eventually be betrayed by an alliance of the two lesser Sith "apprentices". Thus, the natural result is two; one Master, and one Apprentice.
For the thousand years thereafter until the death of Darth Sidious and Darth Vader in 4ABY, there were between one and three Sith, sometimes breaking the Rule of Two; a Master might take two apprentices, or an apprentice, while still serving their own Master, might train their own apprentice (Darth Sidious was apparently training Darth Maul while still apprenticed to Darth Plagueis, while Darth Vader in turn trained Lady Lumiya while apprenticed to Sidious). Of course as Masters and apprentices were killed over the years, they may only be one surviving Sith for a time until a new apprentice is found.
In G-canon, the Sith became extinct at the Battle of Endor, as Vader turned on Palpatine to save his son Luke, and was mortally wounded in the process. In the Extended Universe, the Emperor's Hand, consisting of Force-sensitive assassins, scattered to the winds to remain a constant source of new Sith. Of the Emperor's Hand, notables include Mara Jade, who was saved from the Dark Side and married Luke, and Lumiya, who was personally trained as a Sith by Vader while serving with the Emperor's Hand, and in turn corrupted Han and Leia's son Jacen Solo into the Sith Darth Caedus.