One Night is Sufficient
We visited Kyoto for four days staying at the Kyoto Hotel (great) for two nights, then walked about four blocks to the Tawaraya for one night, then back to the Kyoto Hotel. If you check in early you can enjoy your room, private garden and soak in your tub. Dinner in your yukata is a three-hour affair. I think two nights in a row of this would make the second night seem like "old hat". It is definately worth it, but one night will be fine. While in Kyoto take a walk through the food market.