Recent experiments have demonstrated quantum manipulation of two-electron spin states in double quantum dots using electrically controlled exchange interactions. Here, we present a detailed theory for electron spin dynamics in two-electron double dot systems that was used to guide these experiments and analyze experimental results. The theory treats both charge and spin degrees of freedom on an equal basis. Specifically, we analyze the relaxation and dephasing mechanisms that are relevant to experiments and discuss practical approaches for quantum control of two-electron system. We show that both charge and spin dephasing play important roles in the dynamics of the two-spin system, but neither represents a fundamental limit for electrical control of spin degrees of freedom in semiconductor quantum bits.