Then applying a coat of primer, and 2 coats of Varathane colour. Anybody, have any experience with Varathane colour?
Mike
I haven't had experience with the Varathane brand as I usually use the competitor MinWax. Based on your question, it appears you are asking about using Varathane's "One Step Stain and Polyurethane". I have used both the separately applied stain and polyurethane and the combined stain/poly one step. By far, the best finish is when you apply them separately. You can work the stain into the wood, enhancing grain and controling color depth, then apply two coats of the clear poly. For furniture, I tend to prefer the satin finsh, and the combined product is usually only available in gloss or semi-gloss. I also prefer oil based stains over water/latex as the finish seems much richer...but cleanup is harder.
If your reference to "two coats" was to the stain only, yes, I typically do two coats of the stain, then varnish the next day. The second coat is light and brief to even out the color. While many ways to apply stain, I prefer brushing on with the cheapest brush I can find, then wipe with old pair cotton socks/underwear with holes in it that you have been meaning to throw out.
With the combined, one step product, the stain pigments don't penetrate the wood as the poly seems to act as a barrier. It is almost as if it is a lightly tinted clear paint with the look of stain as it stays on top of the wood rather than soaking in. It does have the advantage on lightly hiding imperfection.
I recently completed new oak steps (previously carpet) and the existing handrail (couldn't find new suitable 2x4 lumber). The steps I did with individual applications - and look great!

I could tell from the finish that the handrail was originally one step stained which stripped well, but was very uneven with dark patches - even with heavy sanding. Even though I had sufficient stain left over from the steps, I did a one-step refinish on the hand rail. You can definately tell the difference. The steps are jaw dropping, while the handrail simply looks OK. If I ever find the new lumber, will replace it and do it right.