How exactly do Reneesme's powers work? Do two people have to be touching her and they hear each others thought, or does the baby see the thoughts...

Renesmee can show people the events that have happened in her life, her memories, almost as though showing them a movie of her thoughts. In order to do this she has to be touching them. She touches people's faces in order to share her thoughts. On page 445-446 (Chapter 22), Renesmee first plays her "memory movie" for Bella. Renesmee's gift is related but a bit different from Edwards -- Edward reads minds, but Renesmee can show others her mind. She also has a power in which she can break through Bella's shield, as she comes from and is a part of Bella. She has an innate ability to win people over, it is theorized that Renesmee's power is the opposite of Bella's, while Bella can keep people out with her shield, Renesmee can break through shields (whether physical or emotional).