We apply the adaptive streamline diffusion method for compressible flow in
conservation variables using P-1 x P-0 finite elements to a conservative mo
del of two-phase flow. The adaptive algorithm is based on an a posteriori e
rror estimate involving certain stability factors related to a linearized d
ual problem. For a model problem we prove that the stability factors are bo
unded. We compute the stability factors for some numerical examples in one-
and two-space dimensions.