High Frequency words (or Sight Words) are grouped into lists of 100 of the most commonly found words in the English language. At my public school (in California) it is suggested that students master the first 100 words by the end of first grade, up to 200 words by second, 300 by third, etc. When I say master, I mean they must be able to read the word immediately without a chance to sound it out.
High frequency words (HFW) are often called sight words because they must be memorized by sight. The reason for this is that many HFWs can not be sounded out. These words should be memorized a few at a time, and constantly revisited until the child is able to read, write, and spell them easily.
Here is a link to lists of high frequency words. Often you will see the words Dolch or Fry's which refers to the author who compiled the list. At my school we frequently use the Fry's list of HFWs.
There are many different ways to teach sight words, and I feel that the flashcard method of drill-and-kill is often ineffective. I usually prefer to teach these words in a way that will get the attention of the student. Whether through games, word hunts, or word searches in books, there are many creative ways one can teach high frequency words. Here is a link to Carl's Corner where she suggests dozens of ideas for teaching these words.