Two-party politics has its virtue--it leads to greater stability because the parties don't need to create and maintain coalitions in order to get enough power to get things done. However, it also has its problems.

When two parties dominate politics, choices are limited: you can choose one party or the other, or you can be marginalized. Most people don't like being marginalized, so they pick the major party that's diverges least from their point of view on core issues, even if they disagree on smaller issues, rather than choosing from among many parties one that broadly represents their point of view. This gives an inordinate amount of power to those who are most influential in setting the party agenda, and results in the illusion of greater support for the party platform than actually exists.

Two-party politics leads to a less informed citizenry, because the range of views that are expressed and that are heard is much more narrow.

Two-party politics results in skewing of third parties, because their membership tends to consist primarily of extremists. I, for example, agree with the philosophical foundation of the Libertarian party, but I would not call myself a Libertarian. Why not? Because while the party does reflect my political philosophy, it does not represent my values. Many people who share my values find a comfortable home in the Republican party, although I believe many of them would find the Libertarian party philosophy to be a better match to theirs. But because the Libertarian party is a third party, and thus has little influence and voice (except in local politics, in some cases), they never even consider being Libertarian. Thus, it is generally those who feel disenfranchized because their views are most drastically divergent from the platforms of the major parties, who join, represent, and set the agenda of third parties like the Libertarian party.

Finally, two-party politics often leaves us choosing "the lesser of two evils" rather than chosing who we'd really like to have represent us.

Without going into detail right now, I think an instant runoff election system would go a long way towards breaking the lock that the Democratic and Replublican parties have on US politics. It would create an opening to begin to elect people who more accurately represented the views of their constituents, because peopel would be able to cast their vote for the candidate of their choice, rather than the person they considered to be a viable candidate who they objected to the least.