Thinking I understood that one....
In my attempt (sorry folks haven't had a chance to look at it this week yet) I was half way here, created a temp poly line mid point between poly 1 end points and closest on poly 2. Created a list of points mid point from poly 2 to closest point on poly 1 (the reverse) then ent mod the temp poly adding in new points as required... it didn't work 100%. Tried to think how to combine the 2 lists of points (1 to 2, 2 to 1). Point at Param might be the one to go for.
Spanner in the works... what happens if the end points are not aligned, example closed polylines, first point on poly 1 say at the 12:00 position, first point on poly 2 say at 3:00 position? - think it will work OK