After one eats the Karpas, and before he begins, the reading of Maggid, he performs "Yachatz," splitting the middle of the three Matzot on the table.  Matza is called "Lechem Oni," or "the bread of poor men," and poor people generally eat only small scraps of bread, rather than proper, complete loaves.  We thus commemorate the plight of our ancestors in Egypt by breaking one of the Matzot on the plate into two pieces.

The Ben Ish Chai (Rabbi Yosef Chayim of Baghdad, 1833-1909) cites from Kabbalistic sources that one should endeavor to break the Matzot into two pieces resembling the Hebrew letters "Vav" and "Dalet."  The "Vav"-shaped Matza should be larger of the two pieces.  (A convenient method of remembering this is that the numerical value of the letter "Vav," 6, is larger than that of "Dalet," 4.)  Although this may entail some difficulty when breaking the Matza by hand, one may nevertheless not use a knife or other instrument for this purpose, because, as mentioned, "Yachatz" symbolizes the bread of the poor, who generally break bread with their hands.  The Kaf Ha'chayim argues (473:118) and says that one should just have in mind that the larger of the two pieces corresponds to the letter "Vav," whereas the smaller piece represents "Dalet" as opposed to breaking them into that shape (Hazon Ovadia, page 44-46.)

After the Matza is broken, the larger of the two pieces is wrapped and hidden, and it is brought to the table again after the meal as the Afikoman.  Our custom is that before hiding the Afikoman we send it around the table and each participant in the Seder holds it with his right hand over his left shoulder and recites the passage of "Mish'arotam," as printed in the Haggada, to commemorate the way Benei Yisrael transported Matza out of Egypt.  The smaller piece of Matza is returned to the plate and placed in between the two complete Matzot.

Thereafter, the plate of Matza is lifted for the recitation of "Ha Lachma Anya."  Some people have the practice of pointing to the plate of Matza.  After the recitation of "Ha Lachma Anya," before the children ask the questions of the "Ma Nishtana," the Seder plate is removed from the table.  It is customary for single young women of marriageable age to remove the Seder plate, symbolic of our hope that they will soon "leave the house" by marrying and establishing their own home.

Summary: When breaking the middle Matza for "Yachatz," one should try to have the larger piece resemble the letter "Vav" and the smaller piece appear like the letter "Dalet"; otherwise, one may simply have in mind that the pieces symbolically correspond to these two letters.  The larger piece is wrapped and sent around the table for the recitation of "Mish'arotam," whereas the smaller piece is returned to the Matza plate.  After "Ha Lachma Anya," it is customary to remove the Seder plate from the table, preferably by a single girl of marriageable age.