Sending and Receiving Mechanics
The coin selection that the client does is performed behind the scenes, the client takes care of the details.

But if you are curious to know what happens behind the scenes:

INPUT:


Address: A  1.0 BTC
Address: B  1.0 BTC


OUTPUT:


Address: C  2.0 BTC


FEE (derived as inputs - outputs): 0.0 BTC

This is assuming you didn't pay a fee.



Let's say instead you only were to pay 1.5 BTC, and a 0.0005 BTC Fee.

INPUT:


Address: A  1.0 BTC
Address: B  1.0 BTC


OUTPUT:


Address: C  1.5 BTC
Address: D  0.4995 BTC


FEE (derived as inputs - outputs): 0.0005 BTC

Address D was an address from your own wallet that the client chose to receive the change transaction.  Your balance in your wallet will then show 0.49995 BTC.



Here's a technical explanation:


http://en.bitcoin.it/wiki/Transactions