Hi, Icebrat! I don't think I have had the chance to welcome you to our thread as I had been MIA for a few weeks when you joined us...so Welcome!!
Anyway, first of all, I think what you are doing for Tess is awesome! I just hope that her biological mother doesn't make anything difficult for you guys. Now...breathe! I know this is very, very nerve wrecking for you and this is new to you but please try to remember a couple things. 1. No matter how unprepared you are, Tess will still be better off with you than she is with her mother. 2. These things will work themselves out. 3. Parenting is a learning experience. Every time you think you have Tess figured out she will no doubt surprise you, frustrate you, and totally turn your world upside down. 4. Last but not least, no matter how hard or frustrating this is for you, it will be so worth it and you will never regret it. Tess will be your dd and she will cause you so much joy that you will wonder how you ever made it through life without her! Sound sappy? Sure. But I promise you every mommy on here will tell you this even when their terror...uh, I mean, angel...is being a B-R-A-T!!! Hang in there! This will all work out for the best and you will figure it out. Tess will help you. You'll see.
When I first had Kylie I relied on this thread and the fellow mommies A LOT and I am forever grateful for them. We are here to help you in any way we can. I also relied on this website. I don't use it as much anymore but I used it a lot when Kylie was younger. The weekly email newsletters were helpful too.
www.babycenter.com
Anyway, Kylie is 19 months. Not quite 2 but close so I will answer your questions based on my experiences so far. Keep in mind that every child is different so really you will learn based on Tess's preferences and personality more than anything we can tell you but here are my answers anyway.
1. Do two year olds know how to unwrap gifts? I think most can but may need a little help occasionally.
2. Does Santa wrap gifts? The ones under the tree, yes (unless they are too big). Stocking stuffers, no. And we don't do all our gifts from Santa. Maybe 1 or 2 big ones and the rest are from mommy and daddy. We like to receive some credit!

3. Do two year olds even know who Santa is? lol, maybe we
should take her to the mall to meet him. Kylie knows who Santa is but doesn't understand the concept of him. Quite a few 2 year olds are scared to see him at the mall so that will be trial and error. Tess may love him or she may be terrified.
4. Special baby detergent or regular detergent to wash her
clothes in, we can't use all free and clear because I'm
allergic. Weird, I know. We use All free and clear because I am so sensitive to smells and Kylie broke out once when I put a fabric softener sheet in with her clothes on accident. I am afraid to use reg. detergent just yet. When she was younger, we used Dreft.
5. Special body wash and shampoo for kids her age? We use Johnson and Johnson head to toe baby wash and the Johnson and Johnson baby shampoo.
6. How about bubble baths are they safe, or do they cause
yeast infections in kids? I read that somewhere. I remember reading that they are safe after a child turns 2 I think.
7. Kid friendly food, what do I do buy frozen chicken
nuggets and corndogs, she really likes chicken nuggets,
do your kids like a specific brand? We have 1 of the pickiest eaters on Earth. I am not joking! She is only in the 5th percentile for weight and is only 20 lbs so I am not much help. We try to feed her what we eat but she absolutely refuses veggies and it's a battle. So yes, we try things like Mac n cheese and kiddy type foods. I think that's fine if you have an awful, underweight eater. If Tess likes veggies then I'd feed her what you eat. That will more than likely be a trial and error type thing too. Lots of toddlers are picky eaters though. Oh, and Kylie hates meat so she's odd anyway.
8. Whole milk, 2%, what kind of milk? We buy lactaid for
ourselves, should we switch her or just give regular milk? We were told regular milk until they turn 2 and then you can switch to 2% or something like that.
9. Any foods to avoid till she's 3 or is she in the clear since
she is two? I think you should definitely ask her mother if she has had peanut butter before and if she is allergic to dairy products or eggs. Those are the 3 foods that cause food allergies most often I think. Surely her mother would know that at least. Kylie is not allergic to peanut butter (we learned that by accident) but my brother was allergic until he was 8 years old.
10. Do we need pull ups and goodnights or just the pullups? Will
they leak overnight? no advice on this one as Kylie hasn't even started PTing yet.
11. What toys/things do I need to buy to keep her occupied. We
really have no idea what she likes, Val said when she was
there that she didn't see her play with a single toy, infact
she didn't see any toys there, but she did buy each kid a
remote type car toy before she left and they seemed to enjoy
it. Another trial and error type thing here. Kylie will play with some very obscure items sometimes that you would not even think of as toys! However, she does love baby dolls and books and anything that makes noise. Books are a good thing. Most toddlers love books.
12. Any hot Christmas toys we need to know of, aside from TmX elmo. Personally, I wouldn't worry about if they are "hot" items or not. A 2 year old isn't going to know the difference. I would just take her to Toys R Us or something and get her to point out things that interest her and go from there. Trust me, Kylie is not shy about showing me what toys she likes.
13. What toys are popular for her age group? See above post. As I said, Kylie likes things that make noise, books, dolls, and things like that. Tess may be completely different.
14. Is there a such thing as a leak proof sippy cup? I agree with SL about the Gerber ones. I have used others that were pretty good too but I like those the best. At one time Kylie refused all except the Nuby ones though so Tess may call the shots some with that too.
15. Regular forks and spoons or kiddie ones? Kylie is strange. She has her own kiddie sets and she also can use reg. ones if she wanted. However, she has a toy kitchen that my dad gave her with "play" dishes and spoons and she often would rather use those than anything else.
16. What kind of toothpaste do your kids use? Do you have kiddie
mouth wash? We use the Oral-B toddler training paste since Kylie doesn't spit yet either. We don't do mouth wash since she doesn't spit yet.
17. If I book the flight for her to come on Sunday, her mother would
bring her and then her mother would leave monday morning. Obviously
she doesn't know me and DP will be at work, once I drop her mother
off and she starts screaming because she's in a car with a stranger
do I just drive and let her cry, or pull over to the side of the
road and try to calm her down? Or do I try and bribe her with candy
and mcdonalds? I would make her mother stay long enough for you to try to put her at ease a bit and then I personally would bribe her with candy and McDonald's if needed! She's had a rough life so bribery might be a nice treat in her case.
18. recommend your safety kit/kid proof kit. I'm a bad mommy and don't really have one other than a thermometer, bandaids, kid nail trimmers, and infant's tylenol.
19. Regular towels or kiddie towels, if kiddie towels where can I
purchase them from? She just uses the same towels as we use. We are still using towels we were given as wedding gifts 7 years ago (can't believe I admitted that!) so I am sure some came from Penney's, Wal-Mart, and who knows where else. I haven't ever had to buy my own towels yet but I probably should buy some news ones soon now that I am actually thinking about it.
20. Anything else I forgot, please,please mention. Ditto about the pediatrician. I would also be asking the mom if she has a shot record for her. I would ask her mother a lot of these questions too as she might be able to tell you some of this stuff (maybe...hopefully). And I would think that Tess has a few odds and ends at her mom's. I would call her mother and ask her if you could have her belongings such as clothes and her carseat!
Good luck! This really will all work out! I promise! I think the hardest part will be the adjustment period for Tess and for you and DP but you will get through it before you know it.
Okay, I think I'll start a new post since this is long.