I'm starting to build some interest in funk, and what better place to start than with Sly and the Family Stone? Are there any albums in specific that I should look for?

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There are some things in life that are universally "good":

Sex, pizza, the smell of fresh washing and slap bass.
How about...all of them?

Ok, less stupid response. If you are looking to get a really good cross section of Sly and the Family Stone, you can't beat compilation of "The Essential Sly and the Family Stone". Two CDs worth of funky goodness.
+1 to all of them.

I'd say a good place to start would be Stand! personally.
Call me Callum

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I agree with Anarkee: get the 'Essential Sly and the Family Stone'

It's got most or all of their famous or well known songs and is generally a pretty damn good compilation
Chocolateman.You need to change your sig. There was a thread on the bass militia sometime ago.You need see it.

and yes, Release Yourself has some good grooves
...it was bright as the sun, but with ten times the heat
Might I also suggest some Bootsy Collins and Parliament/Funkadelic?

Really, best-of collections are the best place to start on something like this. For Sly, look out for the following tracks, however:

If you want me to Stay, Ain't that lovin' you baby, Turn you loose, and I ain't got nobody.
Start with the greatest hits/best of, then take the songs you like best and get those albums.
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I live by the method: 3 or less orange warning labels, and it's safe as a kitten

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EDIT: Sammcl pretty much got it dead on.
The mothership connection by parlaiment.

And Tower of power for sure.

Anything with larry graham, bootsie collins, even marcus miller or maybe some of wootens solo albumns.

Be sure to search for individual bassist because they all have a ton of side projects.

Welcome to funk.