My son had his passport from the time he was a couple of months old. You never know when you are going to have to take a sudden international trip!
We found that (purely by chance one day while shopping) that Costco was the best place to take infant passport photos. The cost was something like $7.50. What was great wasn't the price, but since Costco takes digital photos, we were able to take as many photos as necessary to get a legally acceptable one (and one that mom and dad liked too!). We found that lots of passport photo places still use that Polaroid instant cameras. If the photos do not turn out ok (baby crying, turning head, covering face with hands etc.), you are SOL and they will charge you for additional photos.