Sounds like you installed Terminal Services in Remote
Administration mode, which allows 2 concurrent connections without
any additional licensing requirements.
You can switch to Application Server mode (Control Panel -
Add/Remove programs - Add/Remove Windows Components) to get an
unlimited number of connections.
Note that you also *must* have a TS Licensing Server installed and
activated on your Domain Controller, and that you need a TS CAL
for every client that doesn't run W2K Pro or XP Pro (those client
OS get a free TS CAL from the TS Licensing Server).
If you make the switch to Application Server mode, you will first
have to uninstall all applications that will be used by multiple
users, then install TS, then reinstall your applications, while
the TS is in "install" mode.