For iteration 1:
You pop a character from one queue, and either put it directly into the other queue, else you put the right side of the corresponding production into the other queue.
Now at the end of the first iteration, the "from" queue is empty and the "to" queue is full.
For iteration 2:
You now pop a character from the full queue and do the same thing. Thus what was the "to" queue in iteration 1 becomes the "from" queue here.
You don't necessarily need to duplicate entire queues. Just change the meaning of what "from" and "to" mean.
Here is an example:
The production is F=F+F
The starting sequence is F-F
Iteration 1:
From queue: F-F
To queue: empty
After iteration 1:
From queue: empty
To queue: F+F-F+F
Iteration 2:
From queue: F+F-F+F
To queue: empty
After iteration 2:
From queue: empty
To queue: F+F+F+F-F+F+F+F
I hope that clarifies things.