"Both the morning equally lay" refers to both paths. They are (almost) equal in the eyes of the speaker. Nothing much differentiates them aside from that one is less traveled than the other, simply meaning that less people have walked upon it.
"Yet knowing how way leads on to way" refers to a theoretical branching of either path further ahead. As one walks, he or she may find more and more intersections and more choices; this metaphorically refers to the choices that people make in life. One decision can have significant effects on one's future. With your indulgence, the simplest example:
You are about to leave for school. You're hungry, but you don't want to be late. You leave on time without eating, perhaps three minutes earlier than you would have had you had breakfast. You end up at a red traffic light. Three minutes earlier, a truck blew through that intersection and crushed another car.
Go back in time. You stop and eat. You are hit by the truck. You are then hospitalized and have to endure months of physical therapy.
Imagine how different your life could be? Once decision or choice leads to near-infinite possibilities.
The point of the poem, however, is that it is just as invalid a reason to do something because people DON'T do it as it is the reverse. In other words, don't choose something because it is either popular or unpopular. Find your own reason.
The line "and both that morning equally lay..." needs to be paired with the next line "...in leaves no step had trodden black" to have full meaning.
Both paths are covered with newly fallen leaves, and the leaves have not been stepped on or squished into the dirt or muddiness, perhaps symbolically suggesting neither are "bad" roads.
Some people like to interpret the poem as a message to "do the right thing--the moral thing, take the harder road, which is the path of righteousness"... but the narrator stresses that the paths aren't that different, so to interpret the choice as an issue of good/bad, right/wrong may be stretching.
This poem is definitely about choices and how they can "make all the difference."