Now now, let's be a little bit more gentle to the newbie.
Your original question was "What exactly does DSTWO do?"
Well, it's simple. The Supercard DSTWO is the best DS flashcart out there.
Basically it plays DS ROMS which include dumped games and homebrew.
Homebrew gives any flashcard greater capabilities. Since the DSTWO has its own built-in RAM (if I'm not mistaken), there is homebrew specifically designed for the DSTWO which would not run properly on other flashcarts due to insufficient RAM.
This homebrew may include emulators (GBA, GBC, etc.); however, no matter what you try to do, the Supercard DSTWO will never be able to run an N64 emulator because the Supercard runs in DS mode.
What is DS mode? DS mode is a mode the 3DS boots into which reduces its functionality down to one of a DS. Basically, any improvements from the DS up until the 3DS are not present in DS mode. A 3DS in DS-mode is basically just a different-looking DS.
The DS isn't powerful enough to emulate N64, so the Supercard DSTWO on the 3DS (which would still be DS-mode) cannot emulate N64 games.
I hope this helps.
PS. I really hope not to see another thread like this. This place has put together many stickies designed for newcomers like yourself. I *highly* suggest you go check 'em out. They will help you get a better understanding of the whole thing.
Edit: Thought I'd be nice enough to provide you with a link to all the stickies.
Here you go.