You are basically considered a sole proprietor as soon as you start selling anything, but it's a good idea to register. I think there's a certain dollar amount that you can go up to by just selling on the side and claiming it as extra income on personal taxes.
The best thing is to do a Google search for business entity types and find one that works for you. I think an LLC is the best way to go, but you might find that a sole proprietorship or something else would be best in your case. The sole proprietorship is registered locally by the state or county, and the incorporation is done at the federal level.
Also, most counties or cities require you to get a permit for a home-based business. That is primarily for zoning and safety purposes, and you can check on that through your local Planning Department or on the city website.
Hope this helps a little!