Both on Shabbat and Yom Tob, one must recite the Beracha of "Ha’mosi" over two whole loaves of bread, and the bread must be covered during the recitation of Kiddush. Two reasons are given for the requirement to cover the bread. One reason is so that the bread would not "see its shame," that it is preceded by Kiddush. Normally, the bread is eaten before anything else at the meal, but on Shabbat and Yom Tob, the meal must begin with Kiddush. In order not to "embarrass" the bread, it is covered during Kiddush, as though it cannot see the recitation of Kiddush which precedes the Beracha over the bread. The second reason given is that since the bread represents the manna which Beneh Yisrael ate in the desert, it must be covered, just as the manna was covered by a layer of dew each morning.
The practical difference between these two explanations is the question of whether it suffices to cover the bread with a transparent material. If the covering is required in commemoration of the manna, then a transparent covering is acceptable, because the manna was covered by transparent dew. If, however, the purpose of covering the bread is so that it cannot "see" the recitation of Kiddush, then an opaque covering is needed. Hacham Bension Abba Shaul (Israel, 1924-1998) ruled that one should not use a transparent covering for the bread on Shabbat and Yom Tob, and that it is preferable to use a white covering.
Another practical difference between these two reasons might arise in the case of a person who comes to the table after the others had already recited Kiddush and Ha’mosi, and this person now needs to recite Kiddush. In such a case, must the bread on the table be covered a second time? If the covering is required so that the bread does not "see" that it is being preceded by Kiddush, then seemingly, anytime Kiddush is recited at the table, the bread must be covered, even if bread had already been covered earlier. However, if the purpose of the covering is to commemorate the manna, then one might argue that once the commemoration was made at the table, it does not need to be repeated when somebody comes to the table late and must recite Kiddush. In truth, however, Hacham Bension maintained that even according to this reason, the obligation to commemorate the manna is incumbent upon each individual, not upon each table, and so each new person who arrives at the table and recites Kiddush must cover the bread. Moreover, he writes that if a person had already recited Kiddush, he should nevertheless cover the bread before reciting Ha’mosi in order to commemorate the manna.
Summary: During Kiddush on Shabbat and Yom Tob, the bread on the table must be covered. The covering may not be transparent, and should preferably be white. If a person shows up at the table after Ha’mosi and recites Kiddush, the bread on the table should be covered again. If a person had already recited Kiddush and now comes to the table to make Ha’mosi, the bread should be covered before Ha’mosi.
