Stannis has beseiged Renly's castle so Renly has ridden out there with part of his forces to see what's what, and before they get to fighting Catelyn thinks she can knock their heads together and snap them out of all this silliness.
Needless to say it doesn't work. Stannis is too rigid and thinks he's the rightful king and everyone should bend their knee and that's that. Renly thinks he'd be an awesome king and everyone will love him and that's all that matters. Renly wins the argument with sarcasm: "No one wants you for their king. Sorry." Renly and Catelyn are skeptical about the incest theory too.
Stannis has a very shiny sword. Maybe there is something in this Lord of Light business after all.
Catelyn rides back to Renly's camp. He's going to attack in the morning because he hasn't brought all his forces with him and he's got ahead of his supply lines so if they don't get on with it they'll all starve. This is just the sort of thing I was expecting from Renly: he's got the numbers but he hasn't got the skills. He's also sending Flower Boy to lead the van, which probably won't end well.