I'm not sure what you did wrong. Here's the process.
1. Add camera 1 to the timeline
2. Add camera 2 to the timeline
You should now have 4 tracks - two video and two audio.
3. Select either the two video tracks are all 4 tracks. If you only select the two video tracks, the audio tracks will remain separate. If you select all 4 tracks, everything will be condensed down to a single pair. The simplest solution is to press "CTRL-A" to just select EVERYTHING.
4. Go to Tools - Multicamera - Create Multicamera Track
Now you can toggle the multi-cam view on and off using CTRL-SHIFT-D and add camera switches as needed. Once done with all camera switches, turn OFF the multi-cam view using CTRL-SHIFT-D.
Edward Troxel