This is clearly the hardest step. Not that it's all that hard. You could also say that the other steps are really easy!
What you do in step 4 is pretty much the same thing that you do in step 1 and 2. But here you have one hand tied behind your back. You have only two sides you can turn, and halfway through the step you can't even do many of those moves, since they would destroy what you already built in the step.
From the piece perspective, the goal of step 4 is to add 2 corners and 3 edges to the 2x2x3 block, to make it into a 2x3x3 block (2 full layers).
You have a choice of two ways to expand, either leaving the red or the white layer for last. In the examples we will leave red, expanding with the white-green-orange and white-blue-orange corners and the white-blue, white-green and white-orange edges.
It's best for the beginner to think of this step as two separate steps, 4a and 4b.
First focus on getting one corner and it's two adjacent edges in position. The same techniques you use in step 1 and 2 can be used, but since you can only turn two sides, more manouvering is needed. To do what you want, you first have to move the pieces in a position where the desired turns can be made on the two free sides.
Make sure to only turn the two unsolved sides! It can be easy to get lost and start turning other sides. Keep a firm grip around the 2x2x3 with one hand.
Note that you now have two completed 2x2x3 blocks! Remember which of them you started with. If you accidentally start using the other, bad edges will reappear, and you have to go back to Step 3. A firm grip of the 2x2x3 is at its most important now! You can also use tape to make it temporarily unmovable.
Putting the final 2 pieces in place without breaking anything is almost claustrophobic (there are a few other options (explained below)). Since you can't break up the 2x2x1 block you made in 4a, you have no choices in how to move the white layer. You must wiggle it back and forth, 1/4 turn each time. So your only degree of freedom is to choose one of three possible turns with the red layer every other turn!
The normal way of doing this is to join the two pieces in the upper layer, and then put the pair in place, as in these examples (which are the continuations of the examples above).
A good thing about step 4 is that the (sometimes many) turns can be done blindingly fast, since we only turn two sides, and never need to change grip.
There are easy ways to place the final edge, by very briefly breaking up our previous achievements. For the mirrored positions, almost identical sequences apply. Note that the second one is a variation of Allan™ from step 7!
Check out the examples page for a description of the "broken corner" position, which is pretty common and good to know.
As an exercise, try to find how to do the the middle of the three example cube above in 6 + 4 moves instead of 10 + 12. The solution is here to the right, but it's more fun to try to figure it out yourself.
Below are a few less than obvious 4b tricks. There are many more on the Step 4b tricks page!
For more advanced techniques, check out the block building page.