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Is a two-party system actually best?

I, like many people frustrated with the choice of just two (viable) candidates for major national office, have often lamented the silly, but enduring two-party system of US politics.  I reasoned that if there were more choices, people could find candidates they'd be happier with, candidates who more nearly fit their personal values.  This is a big topic among young techy types my age because socially liberal/fiscally conservative is a widespread value set, and it is absolutely not represented well by either the Republicans or the Democrats.  And, in the arena of capitalism, more choice is absolutely the best way to make the consumer happy.  But is more choice among candidates the best way to make the voter happy?  It certainly makes voters happy with their choice, and thus with their part in the process, but does it make them happy with the results?

Think about how elections differ from purchases for a minute - you don't get to buy what works best FOR YOU in an election, you get stuck with whatever the PLURALITY of your fellow citizens thought was best for them (and you're happy if you agreed with them).  In this situation, the candidate who can make the most people happy (or the fewest people very unhappy) is the "Best" candidate - resulting in the most satisfaction with the RESULTS of the election, rather than the process.

Danny Hillis has put together a nerdy graphic presentation that explains many possible combinations - two parties, two big parties with a spoiler (I'm looking at you, Ross Perot and Ralph Nader!), several roughly equal-sized parties, all overlaid on a bell-curve electorate and a polarized electorate.  http://www.edge.org/3rd_culture/hillis_democracy/hillis_p1.html

Have a look at what he says and see if you don't come to agree with him that "In a perfectly functioning democracy, both candidates will appear equally imperfect, elections' voter turnout will often be low, and all elections will end in near ties."

Personally, I'm starting to think he's right.  Thoughts from the rest of y'all?