To initialize get started with Android/CyanogenMod, you'll need to get
familiar with Git and Repo. 

http://source.android.com/download/using-repo

To initialize your local repository using the CyanogenMod trees, 
use a command like this:

repo init -u git://github.com/cyanogen/android.git -b eclair

Then to sync up:

repo sync


After checking out the repositories, you'll need to create a
buildspec.mk file with contents like this (for dream/sapphire):

TARGET_PRODUCT:=cyanogen_dream_us
TARGET_BUILD_VARIANT:=eng
TARGET_BUILD_TYPE:=release


If you are building for the HTC Passion/Nexus One:

TARGET_PRODUCT:=cyanogen_passion
TARGET_BUILD_VARIANT:=eng
TARGET_BUILD_TYPE:=release


For additional instructions on getting the necessary proprietary
files into your build, and to get things going from here:

http://source.android.com/documentation/building-for-dream