There are basically three ways to do two (or more) color
knitting:
1. horizontal stripes
2. stranded knitting, such as fairisle or jacard
3. intarsia
Intarsia in the round, while possible, is so incredibly
frustrating you have to be a glutton for punishment to try it.
Stranded knitting in the round is pretty much the same, or
slightly easier than stranded knitting in the flat.
So that leaves stripes in the round. The problem there is that
each time you do a color change you get a little zig zag between
the two colors that is unsightly. This is called a "jog."
There are several techniques for avoiding jogs. There are links
below to two of the most popular.