Many thanks for the reply Hans.  I'm a little puzzled by what happens when I
use \setuppagenumbering[alternative=doublesided].  For example:

\showframe
\setuppapersize[letter][letter]

\setuppagenumbering[alternative=doublesided]

\setuplayout[
    grid=no,              % grids make a mess of complex float placement
    topspace=0.50in,      % the space at the very top of the page
    backspace=1.75in,     % the space for binding gutter
    header=0.40in,        % the space for headers
    footer=0.40in,        % the space for footers
    leftmargin=0.75in,    % the space for margin notes
    rightmargin=1.00in,   % the space for margin notes
    height=fit,
    width=5.25in]

\starttext

test

\startspread

\placefigure
 [page]
 [Fig:a]
 {Figure a caption goes here}
 {\externalfigure[a][width=0.8\makeupwidth]}

\placefigure
 [page]
 [Fig:b]
 {Figure b caption goes here}
 {\externalfigure[b][width=0.8\makeupwidth]}

\stopspread

\stoptext

Cheers,
Randall

---
 TeXExec 5.4.3 - ConTeXt / PRAGMA ADE 1997-2005

               texexec : TeXExec 5.4.3 - ConTeXt / PRAGMA ADE 1997-2005
               texutil : TeXUtil 9.0.0 - ConTeXt / PRAGMA ADE 1992-2004
                   tex : pdfeTeX, 3.141592-1.30.4-2.2 (Web2C 7.5.5)
               context : ver: 2006.02.03 21:03
               cont-en : ver: 2006.02.03 21:03  fmt: 2006.2.10  mes: english
               cont-nl : ver: 2006.02.03 21:03  fmt: 2006.2.10  mes: dutch

        total run time : 7 seconds