I'm no expert, but I think the 1st set are starter/baby leaves, like baby teeth (I like analogies XD). They fall out after true leaves start to form. At least, that's happening for me.

Nearly all seedlings start with a set of them, then their true leaves grow after that. x_x *tries to be helpful and a contributing member!* Posting a picture though will help you get more correct info too.

The image I included is a two week old tomato plant of mine and my 'baby teeth' leaves have begun to curl and die. I think that's normal, but maybe someone will come tell us its not in a while. ^_^

Ideally, the cotyledons should remain at soil level. When there is a lot of stem showing below them, it usually means the plants aren't close enough to the light source, and are stretching too much to reach the light. Move the light closer, about one inch from the plants.

With most plants, when you plant them outdoors, bury the stem in the soil right up to where those cotyledons were.