NFC read/write and card functionality in PN532

I am a newbie in NFC technology. I have been reading the user manual and online about PN532 chip. However form the manual I am not sure if the chip can act as both reader/writer (NFCIP-1) and card mode. Basically I want two bracelets to be able to pass each others information. I was thinking to use two PN532 in each, one for reader and the other for card. Do I need an external antenna for reader functionality? Here http://www.adafruit.com/products/789 they are using an additional antenna to have the chip function as a reader so that creates an additional suspicion. In the manual here in the application diagram it is not clear if the antenna is external or internal.

I'm a little confused by what you're asking but the PN532 supports 'Virtual Card mode', PCD mode and PICC mode.

Does this answer your question?

As noted by xFFFF, the PN532 will support card emulation and PCD mode. It can also do peer to peer, which is a little different from PCD/PICC communications. You are mis-interpreting the adafruit picture, the antenna being held in hand is a tag. The antenna (which is for all modes) is built into the PCB.