The amount of dough needed to separate with a blessing: One may only separate Challah with a blessing if he has 1,666.6 grams of flour. If one has less than this amount but more than 1,250 grams he is to separate Challah without a blessing.
Saying the blessing? One is to designate an area from the dough that the Challah will be separated from. Then one is to say the blessing “Lehafrish Challah”. One then separates a Kezayis of dough and says “Hareiy Zu Challah” or “This is Challah”. If one separated the Challah prior to the blessing one may still say the blessing if he [or she] has not yet said “Hareiy Zu Challah”.
What to do with the Challah: The separated piece of Challah is to be wrapped in tinfoil and burnt in the oven [or on the stove]. It is to be wrapped well to the point that the dough will not become revealed while being burnt, as Challah is forbidden to be eaten and thus burning it in the oven is similar to cooking a non-kosher food in one’s oven. Due to this reason one is to never bake any other foods in the oven until the Challah is burnt or removed. Alternatively rather than burning the Challah, one is to wrap the Challah and discard it in the garbage. Practically today this is the more preferred custom to follow due to a Kashrus worry that the tinfoil of the Challah may open prior to the Challah becoming fully burnt hence causing a Kashrus issue for the oven. Furthermore today most garbage is burnt and hence one regardless fulfills the Mitzvah of burning the Challah when discarding it in the trash, and there is thus no need to burn it in one’s Kosher oven.
 For a general summary of the order of Hafrashas Challah see Hakashrus 14/18-22; Piskeiy Teshuvos 242/11; Spice and Spirit Lubavitch cookbook p. 47-50 [The Halachas in Spice and Spirit were edited by Harav Y.K. Marlow OBM]; Hiskashrus 731
 Shiureiy Torah Chapter 3/3-4; This follows the ruling of Rav Avraham Chaim Naah the noted Chabad Posek, author of Shiureiy Torah. So is also the custom of the Sefaradim [see Yechaveh Daas 4/55], and is the vintage custom of Jerusalem Jewry. However some [Chazon Ish] are stringent to require there be 2,250 grams of flower to be allowed to separate with a blessing.
While in Shiureiy Torah he records the amount with a blessing is 1666.6 grams in Piskeiy Teshuvos 242/11 and Hakashrus 14/7 they record in the name of Grach Naah 1660 grams. Seemingly this is a typing error. In “Spice and Spirit” they record 1666.6 grams.
The old Ashkenazi custom: The vintage custom of Ashkenazi Jewry was to separate Challah with a blessing from three Kvartin of flour. [This equals approximately 3 Russian liters which is 1213 grams. If one measures three American pounds then it is 1363 grams. See Koveitz Zalman Shimon p. 77.] Thus they would separate with a blessing from this amount and higher. The source for this custom is Harav Yaakov Viyal in his Sefer Mahriy Viyal chapter 153. There he writes that the Shiur of Chala is a vessel that holds three Kvarton of flour. The Shach [324/3] brings down this opinion and writes that this is the custom. The Aruch Hashulchan [324/10] writes that this is the custom amongst all Jewry and one should not question this ruling.
The Chabad custom: The Tzemach Tzedek [Yoreh Deah chapter 323] writes that “It is known that by us the Shiur of Challah is approximately three Liters [1213 grams]”. This is also recorded to be the practical directive given to people who asked Rav Z.S. Dworkin regarding how much flour is needed to separate Challah with a blessing. [Koveitz Zalman Shimon p. 77] The Ketzos Hashulchan however claims that this Teshuvah printed in the Shut of the Tzemach Tzedek is not truly from the Tzedek Tzedek, as is known that many Teshuvos of other Geonim found their way into the Teshuvos of the Tzemach Tzedek. The Ketzos Hashulchan’s final ruling is as stated above that one is not required to separate from this amount at all and only if there is 1250 grams is it good [but not an obligation] to separate without a blessing. Practically the widespread custom amongst Chabad Chassidim follows the ruling of the Ketzos Hashulchan printed above to separate with a blessing from 1666.6 grams. Nevertheless there are Chabad Rabbanim which rule that one is to separate from three pounds [1363 grams- Koveitz Zalman Shimon p. 77] or 1230 grams [Hiskashrus 731]
 Shiureiy Torah ibid writes one is to separate from 1615.3 without a blessing and less is exempt from separation. However one who is scrupulous separates from even 1,250 grams without a blessing. In however Piskeiy Teshuvos 242/11 they record that one is to separate without a blessing from 1,200 grams according to all opinions. This is the opinion of the Chazon Ish. In Hakashrus 14/7 they record 1,150 grams. In “Spice and Spirit” they record 1,230. Vetzaruch Iyun.
 Rama 322/5
 Following the ruling of Rav Avraham Chaim Naah. However according to the Chazon Ish one separates 55 grams.
 Some have the custom to add “Min Haisa” [see Taz Yoreh Deah 328/1]
 As applies by all Mitzvahs that the blessing is said prior to the Mitzvah. [So writes Hakashrus 14/20; “Spice and Spirit”] However Piskeiy Teshuvos 242/11 records that one is to only say the blessing after completely separating the Challah from the rest of the dough in order so no part of the Challah remains on the dough if one were to separate it after the blessing.
 Hakashrus 14/21
 See Hakashrus 14/22; Piskeiy Teshuvos 242/11
 Yoreh Deah 322/5
 If the Challah became revealed in the oven prior to becoming burnt one is to contact a Rav. The answer to this question depends on whether the dough touched the oven floor, walls or oven grates.
 Some write the Challah is to be doubly wrapped. This is done for purposes of respect so the Challah not be discarded as regular trash. [See Hakashrus ibid] Others however make no mention of this requirement and as long as it is wrapped once it suffices. [Piskeiy Teshuvos ibid]
 See Koveitz Mibeiys Leivi 3 p. 22; Avnei Yishpeh 3/72; Hakashrus ibid