Once upon a time I, a genteel person of the highest standing, would be sending you, also a genteel person of the highest standing, an invitation for an elegant soiree at stately Zorn manor. The invitation would be put in the inner envelope which bore your name and that would go into an envelope with your name and address. My footman would bring the invitation via carriage to your stately manor. In the process, the outer envelope would invariably get some schmutz on it. When your butler received the invite, he would remove the schmutzy outer envelope because a genteel person of the highest standing doesn't do schmutz. The invite in the inner envelope would then be presented to you, I'm sure, on a silver tray.
The inner envelope is a great way to be very specific about exactly who is invited to a wedding. Case in point - Mr. and Mrs. Michael Brady. If you want JUST Mike & Carol to come, the inner envelope would read "Mr. and Mrs. Brady" if you're very formal, or "Mike and Carol" if you're a little less formal.
Should you decide you do want the whole family, the outer still says Mr. and Mrs. Michael Brady but the inner envelope would then read:
Mr. and Mrs. Michael Brady
The Misses Marcia, Janet and Cynthia Brady
The Masters Gregory, Peter and Robert Brady
Mike & Carol
Marcia, Jan and Cindy
Greg, Peter and Bobby
Now, if you don't have inner envelopes, don't worry! I probably have 3 or 4 jobs a year that come with inner envelopes (I'm on the Left Coast. Dude, we're way informal.) However, there are some places that say you should NOT put "and guest" or "and family" on the envelope. I sent out some queries and thanks to Mindy Lockard, The Gracious Girl herself, I have word from on-high, Peter Hopkins, Crane and Company's historian.
His answer: This is the type of situation that suggests some flexibility. After all, etiquette exists to make people comfortable in situations where conduct is not necessarily intuitive. And we live in a much more complex world where hard and fast rules can themselves create uncomfortable situations.
With that as a preface, if a couple wants to demonstrate their commitment to the environment by using only a single envelope, a little deviation from the hard and fast is called for.
It is entirely appropriate for the couple to address the envelope:
Mr. Peter Hopkins and guest
Mr. Peter Hopkins
and guest (that's an indent)
Hopefully I've made things a bit clearer when using - or not - inner envelopes. If you have other questions, I'm an email away!