In co-op play, the “host” plays as Bishop and handles command of the squad, while the “guest” plays as Knight and rides shotgun (perhaps literally), having limited interaction with the AI squad mates. Of course, full squad control is available, so all the things you can get your AI mates to do in the single-player side—stack up on a door, the various “XX-and-clear” options, toss smoke or frag grenades, etc.—can also be commanded in the co-op component.
As we've said before, it's disapointing because the game has gone from a 4 player to a two player co-op experience. The good news though is everything seems tightly focused now, instead of an afterthought. Some other pluses is that both players get an even share of experience and rewards, as well both players share any unlocks earned in co-op mode. Rainbow Six Vegas 2 hits the Xbox 360 and Playstation 3 later this month.