[1] The standard pronunciation karpas may be a corruption which developed due to a misidentification between this and a similar word found in Esther 1:6 which means fine linen, originally though it was pronounced "karafs".
The idea behind the salt water is to symbolize the salty tears that the Jews shed in their slavery in Egypt.
One reason given for dipping a vegetable into saltwater is to provoke children to ask about it, as per the theme of the Seder night that the story is to be recounted by way of question and answer.
Dipping a vegetable prior to the main meal is not usually done at other occasions, and thus arouses the curiosity of the children.
Karpas is therefore done at the beginning of the seder, just as Joseph's tunic being dipped into blood began the Israelites' descent to Egypt.