Hi,
Whenever a byte is received by the USART it is made available in the receive buffer while the other byte (2byte buffer) still gets stuffed. You must read the byte before your another byte is full. If not, your USART faces a buffer underrun condition and an error is raised.
I don't mean to be picky here but the 'buffer' is actually two bytes so a third byte can be 'on its way in' without buffer over run. As soon as the third byte is clocked in, though, you'll get a buffer over run error.

There's a document on the Microchip website called Usart.pdf (no document number or anything) that explains the operation in asynchronous mode. The following is an extract from it:
The use of a separate receive shift register and a FIFO buffer allows time for the software running on the PICmicro MCU to read out the received data before an overrun error occurs. It is possible to have received two bytes and be busy receiving a third byte before the data in the RCREG register is read.
Hope it helps.

/Henrik Olsson.