Glass2 is an updated version of the basic glass material. It is the recommended material for glass, crystals, gemstones, transparent plastics and clear liquids.
It takes its properties almost entirely from the volume assigned to the object using it. It does not even have its own color or index of refraction. Since it takes its IOR from the object's volume properties, it is able to understand the IOR between surfaces to some degree, and due to the nature of the volume system this allows for more specific and technical optical properties than are possible with the older glass material.
This option disables refraction during transmission. The effective result is that transmission will appear as though the glass had an IOR of 1.0, while reflections will use the specified IOR. The resulting glass will show only the transmission/reflection colors, volumes effects, and reflections, and is not terribly realistic. However, it won't look much different for a thin sheet of glass such as a window, and it will render much faster, as there is less to compute.
There are several other important features to architectural mode, besides reducing the necessary calculations of the material. Because there is no refraction during transmission, architectural glass is transparent to shadow rays and alpha, neither of which is the case in non-architectural mode. This is especially important for window glass. Because it is transparent to shadow rays, it is possible to perform direct light sampling through the window to outside light sources, greatly improving the render efficiency. And because it reflects but still propagates alpha, it allows you to have realistic interior reflections and absorption on the windows, while still being able to composite in a backdrop for the view outside of the window.
This enables chromatic dispersion, which is ignored otherwise. Chromatic dispersion is the splitting of the spectrum into a rainbow of colors, such as from a prism. Be warned this is an intensive effect that will greatly increase the number of samples (and photons, if applicable) that are needed! When using dispersion, it is recommended that the volume have a Fresnel texture type other than "constant" as constant does not supply enough information to calculate dispersion accurately.
Glass vs Glass2
LuxRender also contains a "Glass" material which has its own color and IOR values that it will use. Glass can be used with volumes as well, however it will ignore the IOR, and will still add its own transmission color unless this was set to 1.0 (full white).
In most cases, Glass and Glass2 will be similar in appearance, given the same volume, and IOR settings on the Glass material and the volume being similar. However, Glass2 can accurately calculate the relative index of refraction between two surfaces (such as water in a glass), which Glass requires to be done manually with a 3rd mesh and the user calculating the relative IOR value by hand. The volume system allows for its mediums to be given more specific and technical IOR data than the Glass material, such as using the Sellmeier equation, so Glass2 technically can handle light more accurately than Glass.
On the other hand, since the Glass2 material does not define its own surface, it lacks the Glass material's option for things such as a separate reflection color (for painted surfaces) or using a thin film coating. Depending on your exporter, it may also be more work to set up Glass2 when you just want some generic glassy surface for an object off to the side of the frame.
Example of glass2 IOR handling
This image demonstrates the glass2 IOR handling. There are mainly four different interfaces in this scene (air/glass, glass/water, air/water, and water/luxball). You only have to define the volumes (air, water, glass, luxball) with the specified IOR. Assign them to the interior, exterior slot respectively in the material for the interfaces. The IOR handling of the glass2 material calculates the right relative IOR.