Look up RC ppm (Google is VERY keyword sensitive)
1 controlling stick generally only can move in 2 directions, horizontally or vertically, the center spring makes it seem like four directions. You would get two signals out, 1 for the left/right, one for the up/down. Yeah you pretty much have it right, it's relatively flexible. Basicaly the servo signal itself is 1-2ms in length 1.5 being center. I'm not sure what the minimum limit on the blanking period between pulses is but it is probably very small. Any pulse over the maximum servo length is received as a reset pulse so the receiver goes back to the first servo and goes down the line again sequentially. This is why a glitching RC setups can act very oddly as applied noise or reception issues can cause it to desync with the frame pulse and send either noise or the wrong servo pulse to a specific servo. PCM is a digitally sent version of the same signals however it will tolerate noise up to a certain point and then glitch horribly badly and then you get nothing at all. Many RC'ers still prefer PPM because by judging the reaction of the vehicle to their inputs they can determine the signal quality.