(Abridged) We investigate the dynamical evolution of coplanar hierarchical two-planet systems where the ratio of the orbital semimajor axes alpha=a_1/a_2 is small. The orbital parameters obtained from a multiple Kepler fit to the radial velocity variations of a star are best interpreted as Jacobi coordinates and Jacobi coordinates should be used in any analyses of hierarchical planetary systems. An approximate theory that can be applied to coplanar hierarchical two-planet systems with a wide range of masses m_j and orbital eccentricities e_j is the octupole-level secular perturbation theory (OSPT). The OSPT shows that if the ratio of the maximum orbital angular momenta, lambda \approx (m_1/m_2) alpha^{1/2}, for given a_j is approximately equal to a critical value lambda_{crit}, then libration of the difference in the longitudes of periapse, w_1-w_2, about either 0 or 180 deg. is almost certain, with possibly large amplitude variations of both e_j. We establish that the OSPT is highly accurate for systems with alpha<0.1 and reasonably accurate even for systems with alpha as large as 1/3, provided that alpha is not too close to a significant mean-motion commensurability or above the stability boundary. The HD 168443 system is not in a secular resonance and its w_1-w_2 circulates. The HD 12661 system is the first extrasolar planetary system found to have w_1-w_2 librating about 180 deg. The libration of w_1-w_2 and the large-amplitude variations of both e_j in the HD 12661 system are consistent with the analytic results on systems with lambda \approx lambda_{crit}. The HD 12661 system with the best- fit orbital parameters and sin i = 1 is affected by the close proximity to the 11:2 commensurability, but small changes in the outer orbital period can result in configurations that are not affected by mean-motion commensurabilities.

32 pages, including 8 figures; uses AASTeX v5.0; accepted for publication in ApJ