I have seen many people (especialy in chabad) where a tallis katan that has a closed, round neck. While I've seen others where an equally long tallis kattan however that has a slit down the middle and a sort of "open v-neck" style. I figured those that where a closed tallis katan are concerned for the "shiur" (or size) that is must be. However what argument are these 2 "styles" based on what exactly? If in each case the tallis katan is the same length, why is there opinion that holds that the neck must be closed, or on the other hand, may be open?
My Rav, R' Shimshon Yeshaya Adler (Monsey NY), told me that the very large hole/long slit may completely invalidate the tallis' as it renders it unfit as a proper covering of the body. The Torah only required a garment that is of size one will use it to go into a marketplace. Just as it is possible that today's short jackets permit short talleisim ketanim, one could reason that today when it is normal to wear a shirt with several of the top buttons undone, revealing the chest, so too an equally deeply slitted tallis katan would be acceptable.
A completely different reason for a small round opening is to prevent the tallis katan from creeping up over the shoulders and onto the back.