Bob,
Thank you for this explanation, I've never seen it explained that way! You're right, I assumed 4 states meant 2 bits, either of which might be 0 or 1, every time.
I truly appreciate your contribution to our hobby: not only your stewardship of JMRI itself, but the depth of knowledge you've had to gain in order to provide this fantastic tool and the unbelievably good support. In fact I'm going right now to the site to donate to the JMRI project.
Thanks again!
Sincerely,
Steve Davis
KCS 3rd Sub