Photoshop :: Printing 2-color Files With Tonality -- Do Duotones Work Well?

Have a question regarding setting up a file for printing 2-color images...Similar to an earlier thread, I am starting off with a CMYK file, which I've changedf to a grayscale file. However, this grayscale file is a layered photographic pattern, one layer has a crossstitch-like scanned-in pattern, another layer has a textured background pattern with little dots. I would like to convert this image to a 2 color image, where the different colored areas do not overlap(one color being the crossstitch pattern and the small dots, the other color the textured background). I've tried using the duotone function in photoshop, but keep on getting color blending of these two colors where they overlap. Is there any way using this duotone function to specify that the 2 colors don't overlap/overprint each other? I am planning to use 2 pms colors (7509 and 259 while I test out ways until I get my 2-color idea working).

I also tried doing spot channels, and even though this makes it easy to indicate which parts of the image are specifically one color or the other, the colors are flat colors, and I lose the texturing and "3-d" effect the grayscale pattern has right now.