Two stage is just that. A high BTU stage and a low BTU stage for a lower demand. A modulating furnace usually has a range of 40-100% of BTU output in very small increments down to 1%. It is all about comfort. You want to be certain though that the modulating furnace can move both up and down based on demand (outside temperature changes). For best operation, both types should have the recommended thermostat to achieve furnaces' capabilities.

IMO

This post was edited by tigerdunes on Wed, May 1, 13 at 8:58

A modulating furnace will have a variable speed blower, but a 2-stage furnace may or may not have it. Some 2-stage furnaces have multi-speed blowers. This means the speed of the blower is set for the low and high stages at the time of the installation. From then on it is always fixed. The furnaces which have variable speed blowers tend to be more expensive. The variable speed blower will maintain a constant air flow during the heating season, and can help with dehumidification in the summer.

I am not familiar with the details of the Lennox furnaces. You would have to review the features of each furnace to determine whether it is variable speed or not.

From everything I can tell it's mainly about having more even heat then, which I'm not sure is all that important to me. I'm not terribly dissatisfied in that regard with what I have now. It sounds like the fan runs more though and I despise that about forced air heat - that blowing noise. Would have hot water heat in a heartbeat if I could. So I may not care for it because of the blowing even if I didn't mind paying more for it.

Good to know about the need for appropriate thermostat. The proposal indicates some thermostat that's "included". I was thinking I don't need a new one but if I need one that is right for the furnace then I'll do that.