The NBA Salary Cap FAQ has been updated with info on Two-Way players. Some things to note...
A team can only have 2 players on Two-Way contracts, which explains the increase in roster size 17. A team still only has 15 roster spots but they are given 2 extra for Two Way players, so they can have up 17 players so long as 2 of those are occupied by players on Two-Way contracts.
Two-Way players can only spend 45 consecutive days on the main roster at a time.
Their Two-Way contract doesn't count against a team's salary cap.
Two-Way players cannot play with their team in the playoffs but they can travel and practice with them.
A player is ineligible to sign a Two-Way contract if he will have more than three years of NBA service at any point in the contract. A player cannot play under Two-Way contracts for the same team for more than three years total. I believe that will keep 1st round picks from signing "Two Way" deals or having the Exhibit 10 provision placed in their contract that would allow a team to convert their deal into a Two Way contract.
There is more info here...
http://www.cbafaq.com/salarycap.htm#Q82
Their is a provision in some contracts so a team can change a player's contract from a regular deal to a Two-Way contract, which would then open up one of their 15 roster spots while converting that players status to one of their 2 allowed "Two-Way" deals. .
The link below discusses the possibility of converting a standard NBA contract to a Two-Way contract. It's an option placed in the contract itself, called "Exhibit 10", and that allows their contract to be changed to a Two Way deal. They can have up to 6 players signed with "Exhibit 10" provisions in their contracts. I can see that being something standard that will go into deals offered to 2nd round picks, and undrafted rookies. It also discusses how a Two-Way Contract can be changed to a standard NBA contract.
http://www.cbafaq.com/salarycap.htm#Q83