Another mention of the two stage method. It helps explain it a little more:
"the amount of mixing affects gluten development. In the creaming method, the sponge method, and the angel food method, the flour is added at or near the end of the mixing procedure so that there is very little gluten development in properly mixed batters. If the batter is mixed too long after the flour is added, the cakes are likely to be tough.
In the two-stage method, the flour is added in the first step. But it is mixed with the high ratio shortening, which spreads well and coats the particles of flour with fat. This coating action limits gluten development. It is important to mix the flour and fat thoroughly for the best results. Observe all mixing times closely. Also high-ratio cakes contain a high percentage of sugar, which is also a tenderizer."
And about high ratio shortening and other fats:
"Different fats have different emulsifying abilities. High-ratio shortening contains emulsifiers that enable it to hold a large amount of water without curdling."
And about the balancing of recipes:
"A normal starting point in discussing cake balancing is old-fashioned pound cake. This cake is made of flour, sugar, butter, and eggs in equal parts. As bakers experimented with the basic recipe over the years, they reduced the quantities of sugar, fat and eggs, and compensated by adding milk. This is the origin of the modern butter cake.
The general rules for balancing creaming method cakes made with butter or regular shortening are as follows (all ingredient quantities are, of course, by weight):
*the sugar is equal to or less than the flour.
*the fat equals the eggs.
*the eggs and liquids (milk and water) equal the flour.
With the development of emulsified shortening, it became possible to increase the quantities of eggs and liquids. The general rules for balancing high-ratio cakes (using emulsified shortenings) are as follows:
*the sugar is more than the flour (110 to 160%)
*the eggs are more than the shortening.
*the liquid (water, plus the water in milk and eggs) is more than the sugar."
Not all of this is explicitly pertinent to the discussion, but I think it helps with understanding.
I hope I'm not being too long winded!