2-corner portfolio? equivalent, therefore, directly

RobertA

Looking for confirmation.  
The text says that using 2-corner portfolio analysis is mathematically equivalent to the more cumbersome MVO formulas for determining portfolio standard deviation (assuming correlations = 1).  It then says that the actual corner portfolios do in fact consider correlation and the results are therefore pretty accurate but will ultimately result in more conservative estimates than if actual correlation were directly factored in (ie not 1).
1.)   So how are we assuming correlations of 1 but the actual CPs include specific correlation - how are we not therefore capturing the correct correlation but instead assuming Corr =1 ?   
2.)   Can someone provide a simple example of how borrowing on short sale leverages up return - tyring to think through it and my mind is dead at the moment.
Many thanks everyone!