I found this really interesting article at taosim.about.com. She talks about the meaning of the symbol and I thought I'd share part of it here:
In terms of Taoist cosmology, the circle represents Tao - the undifferentiated Unity out of which all of existence arises. The black and white halves within the circle represent Yin-qi and Yang-qi - the primordial feminine and masculine energies whose interplay gives birth to the manifest world: to the five elements and "ten-thousand things."
I had never realized how much inherent movement there was in the yin yang symbol until I saw the image posted here on the right. Elizabeth goes on to talk about that movement:
Yin & Yang are Co-Arising and Interdependent:
The curves and circles of the Yin-Yang symbol imply a kaleidoscope-like movement. This implied movement represents the ways in which Yin and Yang are mutually-arising, interdependent, and continuously transforming, one into the other. One could not exist without the other, for each contains the essence of the other. Night becomes day, and day becomes night. Birth becomes death, and death becomes birth (think: composting). Friends become enemies, and enemies become friends. Such is the nature - Taoism teaches - of everything in the relative world.
I also liked what she said about circles within circles, and the interdependence of opposites:
Smaller Circles Within The Larger Circle:
What's great about the Yin-Yang symbol is that the smaller circles nested within each half of the symbol serve as a constant reminder of the interdependent nature of the black/white "opposites." It reminds the Taoist practitioner that all of relative existence is in constant flux and change. And while the creation of pairs-of-opposites would seem to be an aspect of our human software, we can maintain a relaxed attitude around this, knowing that each side always contains the other, as night contains day, or as a mother “contains" the infant that she will, in time, give birth to.
Article by: Elizabeth Reninger