Darth Bane was a total badass who came up with the Rule of Two, as an attempt to fix the problems that had plagued the Sith for thousands of years.
Brotherhood of Darkness
Prior to the rise of Darth Bane, there were many Sith Lords organized as the Brotherhood of Darkness with Lord Kaan as its leader. Bane was recruited out of the Sith military to go and train to become a Sith Lord. After temporarily losing his connection to the Dark Side, Bane devoted himself to studying the texts of the ancient Sith and learning their secrets. He came to the conclusion that the Brotherhood model was inherently weak, since it allowed the weakest members to be treated as equals to the strongest. While feigning loyalty to the Brotherhood, Bane took the title of Darth, and plotted to destroy the Brotherhood.
During the Sith's long war with the Jedi, led by Lord Hoth, Bane convinced Kaan to detonate an ancient Sith weapon called a Thought Bomb. Kaan, unfamiliar with the concept, decided it was a good idea. Bane knew that it would destroy not only all the Jedi in the area, but also all the Sith. Through this deception, Bane eliminated all the other Sith.
Rule of Two
As a replacement for the Brotherhood, Bane formulated the Rule of Two. Basically, this meant that there should always be two, and only two, Sith Lords. One to embody the power of the Dark Side, the other to crave it. He chose a young girl with great potential to be his apprentice, and made her Darth Zannah.
Bane thought that adhering to the Rule of Two would eventually allow the Sith to control the Galaxy and destroy the Jedi. The Emperor and Darth Vader were the culmination of this theory, but they didn't quite finish off the Jedi.
What Happened to Darth Bane?
Nobody knows what happened to Darth Bane. If he was redeemed, I'm not reading any more Star Wars books ever. That would just be stupid.
What is known is that Bane feared his apprentice, Darth Zannah, would be unable to fulfill her Sithly duties by murdering him to ascend to power. His fear turned out to be baseless. He lived from the Old Republic year 24,027, and died in 24,071.