It is well known that multiple input multiple output (MIMO) systems offer the promise of achieving very high spectrum efficiencies (many tens of bit/s/Hz) in a mobile environment. The gains in MIMO capacity are sensitive to the type of channel encountered in the radio environment. To date most analytical work has concentrated on Rayleigh fading channels. Hence, in this letter we consider the capacity outage performance of MIMO systems in Ricean channels. Due to analytical complexity we concentrate on dual antenna systems (either two transmit or two receive antennas) and derive exact densities and distribution functions for the capacity.