If you're ever wondering about what was "officially" released, the safest bet is to look at the promo flyers. The main flyer for the game only lists two 4-player versions. This one, however, shows that apparently after it's initial release, a 2-4 player conversion kit was available:
http://www.arcadeflyers.com/?page=flyer&id=2170&image=1The other "official" way to find out stats is by finding the manuals for the game.
http://arcarc.xmission.com/Inside "PDF Arcade Manuals and Schematics" are the manuals for Gauntlet Legends and several for Dark Legacy.
In the service menu there's an option for cabinet type. Default is '4 Player 1 Cabinet'. I'm guessing this is the option you'll need to change. While this is a bit of speculation, Dark Legacy's Conversion Kit manual shows this same option and states that "You can also select one, two, or three Players."
Being this option is included, I wouldn't think there were multiple versions of the hardware (unlike Konami's 4-Player games). If it'll only work as 4-player, I don't see why you couldn't just hook up 2 out of 4 sets of controls. In Legends you pick your character, and only color is dictated by player-position. Pick your two favorite colors and go.