The number 1234 (decimal) has 1 as it's "most significant" digit and 4 as its "least significant" digit. That's what the MS and LS stand for in numbers and applies to any base (I expect someone will point out that a certain base doesn't or maybe modulo arithmatic doesn't have such concepts!!)
Hexadecimal is the same and so is binary. I'm assuming that the full value in hex when the two bytes are interpreted as 1 byte is 20FC (or maybe FC20). I can't tell you which way but the data sheet should say.
Anyway, in decimal 20FC is (2 x 4096) + (0 x 256) + (F x 16) + C and for hex F=15 and C=12. Plug-in the decimal numbers and you get 8192+256+240+12 = 8700. If you were expecting a different number in decimal then maybe it's the other combination 61440+3072+32+0 = 64554.
As for the value 65475 you quote, I cannot see either of the numbers I've come up with as matching - 64554 is the closest but only you can tell me the reason for this. I've just done some simple maths in different bases and I may have made a number error somewhere but the important thing hopefully to you is that you can now convert hexadecimal to decimal. A=10, B=11, C=12, D=13, E=14 and F=15.
Converting from hex to binary is more straightforward if you remember the first 16 binary numbers 0000, 0001..... 1111 - these equate to decimal 0 to 15, so if you have the hex number FC20, its binary equivalent is 1111 1100 0010 0000. The left digit is the MSb i.e. most significant bit and the right digit is the LSb.
Hope this helps a bit and here's a link about two's compliment http://en.wikipedia.org/wiki/Two's_complement
Basically it's a number format for dealing with negative numbers in binary
Two's compliment representation of signed integers is easy to manipulate in hardware. For example, negation (i.e. x = -x) can be performed simply by flipping all the bits in the number and adding one. Performing the same operation in raw binary (e.g. with a sign bit) usually involves a lot more work, because you must treat certain bits in the stream as special. Same goes for addition - the add operation for negative numbers is identical to the add operation for positive numbers, so no additional logic (no pun intended) is required to handle the negative case.
While this doesn't mean it's easier from your perspective, as a consumer of this data, it does lessen the design effort and complexity of the device, thus presumably making it cheaper.
Best Answer
To get the 2's complement you must define the number of bits.
The most significant bit is the sign bit.
So if the number of bits is 8 then you should get:
14 is 00001110 (MSb=0 : positive)
-14 is 11110010 (MSb=1 : negative)
if the number of bits is 4:
2's complement of A is 2^n-A which we can get also if we apply: 1's complement + 1 (since the 1's complement is 2^n-1-A)
That is why 14 as raw binary is -2 as a 2's complement on 4 bits (it is 16-2 since 2^4=16) and there is a reason for that. In fact, the goal is to get a negative number coding where we can still have right results when applying basic operators like adding for instance on negative numbers, positive numbers and a mix of them.
Note: MSb is the most significant bit. Do not confuse with MSB (most significant byte).