Femtosecond time-resolved photoelectron spectroscopy provides a unique tool to study the dynamics of optically excited electrons at surfaces directly in the time domain. We present a new model for two-photon photoelectron spectroscopy from surface and image potential (or Rydberg) states which is based on density matrix theory. The formalism accounts for the influence of both energy and phase relaxation on experimental spectra and thus permits the study of the nature of inelastic and elastic scattering processes at surfaces in more detail. The analysis of experimental data employing the proposed model reveals a new mechanism for optical excitation of electrons to normally unoccupied states at surfaces which is feasible due to the influence of electronic dephasing. We discuss the nature of different relaxation channels with respect to our studies of image state dynamics on the bare and Xe or Kr covered Cu(lll) surfaces.