We're starting with the minute hand, just learning how the hand moves and getting a general idea of the passage of time. We're not paying much attention to the hour hand just yet (DD is 3.5 and just learned her numbers to 12). We also moved the kitchen clock down lower so we could point to it.
"The big hand is on the 9" (point to the big hand). "When the big hand is on the 12" (point to 12) "the french fries will be done."
Also pointing out the various times of day, e.g. "Look, the big hand is on the 12 and the little hand is on the 8." (Point to each). "Its 8 o clock. Its time to put pajamas on."
That sort of thing. Seems to work better to tie it to real life experiences than use, say, a practice clock or worksheets or pictures of clocks. At least, for now.