The challenge with teaching many of the words is that they are boring.
What I mean by that is you cannot attach a picture to many of them very easily like you can with other words/objects. The BrillKids story books do a great job of introducing them in context and through repetition in some books, such as I see a lion. I see a bear. I see a panda, etc. You can't really read a story or even read a grammatically correct sentence without the "connecting" sight words.
http://www.mrsperkins.com/dolch.htmI took these lists and made LR files broken up into sets of 10 and taught them that way.
Preschool Prep also offers "meet the sight words" 1, 2, & 3 which are great, we used those too. I really do love PP, BrillKids tops my list of excellent educational materials for young children but I adore their curriculum too and I'd say they come in second.
So, that is another way. When to introduce them? Whenever you feel like, I think I started around 14 months for DD1, earlier with DS2.
http://www.preschoolprepco.com/h/s/sightwords-info.php