No idea if it supports two at once, but I'd be very surprised if it didn't.
I can confirm that using an official wireless 360 pad works flawlessly.
Currently I'm playing X-Com: Enemy Unknown, but it's great for platformers too. Guacamelee, Fez, Mark of the Ninja etc....
Tried Dishonoured briefly, worked great with a pad.
I'm on a wired lan, and I've had no issues at all, but I hear games are effectively unplayable on a wireless connection.
Can't say enough good things about the Steam Link, the amount of functionally you get for such a small cost is brilliant.