The Bin 2x2 command decreases the size of an image by a factor of two in each dimension. It does this by subdividing the original image into two-by-two blocks of pixels and computing the average of each block of four pixels; the average becomes a single pixel in the new image.
This operation corresponds to two-by-two binning in a CCD camera, except that a camera integrates (adds) the charge from each contributing pixel instead of averaging it. To achieve this result, use Pixel Math afterwards to scale the image up by a factor of four.
If each image dimension is not an exact multiple of two, the last row and/or column of the input image are ignored.
Binning is very fast, but a slightly smoother result can be obtained using the Half Size command