I've recently installed a Skywriter in two different planes, and am VERY pleased. An excellent system, imo.

No, the plane would not have two mufflers...you would replace the stock muffler (presuming the engine came with one) with a "smoke muffler", which is a muffler that includes, at the very least, a fitting on the side to hook the smoke line up to. The system makes smoke by injecting smoke fluid into the muffler, where the heat causes it to smoke. Many smoke mufflers also have coiled tubing inside the muffler, through which the smoke oil travels...this allows the oil to be heated more thoroughly, thus producing better smoke and less wasted oil.

Which smoke muffler to get depends on the motor you're using (some have several options, others just one or none) and the airplane you're putting it in. Smoke mufflers are frequently larger and or heavier (or at least different shapes) than their stock counterparts, so the type of plane will effect whether or not the muffler fits, whether or not it can handle the extra nose weight, etc.

Finally, you can make your own smoke muffler. There's an excellent article here on RCU called [link=http://www.rcuniverse.com/magazine/article_display.cfm?article_id=455]Got Smoke?[/link] that will give you some suggestions on how to do that, as well as discussing smoke production and techniques in some detail.

HTH