The problem with splitters (and for that matter most devices in the line) is a reduction of the signal-to-noise ratio. Inlet signal strength is measured in dB (yup, jsut like audio signals). The visual impact is a loss of picture accuracy, like color reduction, or worse, snow.
2-way splitters drop the signal by 3.5-4 dB. 4-way by about 7 dB.
Each splitter will do that, so if you have two in-line, you get 7-8 dB loss.
the other half of that is that the cable company has a certain amount of leeway in increasing (and decreasing) the signal strength to your house. It is not unlimited, which is why a lot of homes with cable modems - which require higher signal strengths than TVs - on one trunk line will suffer a degradation of service; unless, of course, the cable company increases the strength of the trunk line signal.
Check out the following website for more info:
Signal loss web page
Mike