My wife did a huge amount of research on this. Then she just told me what I needed to know.
This is the way we taught Ya-ya (are teaching, actually):
1. Choose a few signs at a time (we started with 5, now working on 10 at a time) that you want to concentrate on. Some suggestions are eat, milk, nurse, water, more, all done, mommy, daddy, bath, baby.
2. Choose signs about things that are of high interest to the baby. Ya-ya's first sign was "milk." Her second was "water" for swimming lessons. Her third was "bubbles" (actually a raspberry, not the ASL sign for bubbles).
2. Be as consistent as possible; as many care givers as possible should use the signs and you should try to always use the sign with the word.
3. Use positive reinforcement when you see a motion that is close to being one of the signs. (If she puts her hands together, ask "more?")
4. DON'T GIVE UP! It takes 'em quite a while to get the idea, then some more time to get the dexterity to actually make the signs. The payoff is great, though.
Some things I've noticed about how Ya-ya signs:
1. Most of the signs she does are approximations of what we are teaching. She also has several signs that have almost exactly the same motion; you have to use context to know what she is talking about.
2. She knows a lot more signs than she uses. She only uses the ones that
she has an interest in.
3. She does not use the backs of her hands. If we use a sign that uses the backs of the hand she will mirror it using the palm of her hand.
For more info:
http://groups.yahoo.com/group/signingbaby/