It's much easier to redefine the axes in the Input Manager (menu Edit/Project Settings/Input): click the Horizontal axis and press Ctrl-D to duplicate it, then change their names to Horizontal1 and Horizontal2 (for instance); in Horizontal1, clear the fields Negative Button and Positive Button fields (initially set to the arrow keys), and in Horizontal2 clear the fields Alt Negative Button and Alt Positive Button (initially set to A and D). Repeat the process for the Vertical axis, and presto! you've got two horizontal and vertical axes.
NOTE: remember to use the appropriate axis name for each player, maybe setting variables in the Inspector:

var speed : float = 10.0;
var rotationSpeed : float = 100.0;
var vertAxis = "Vertical1"; // change to "Vertical2" for player 2
var horAxis = "Horizonatal1"; // change to "Horizontal2" for player 2

function Update () {
    // Get the horizontal and vertical axis.
    // By default they are mapped to the arrow keys.
    // The value is in the range -1 to 1
    var translation : float = Input.GetAxis (vertAxis) * speed;
    var rotation : float = Input.GetAxis (horAxis) * rotationSpeed;

    // Make it move 10 meters per second instead of 10 meters per frame...
    translation *= Time.deltaTime;
    rotation *= Time.deltaTime;

    // Move translation along the object's z-axis
    transform.Translate (0, 0, translation);
    // Rotate around our y-axis
    transform.Rotate (0, rotation, 0);
}