Linda,
I like to harvest my dill when the seed heads are still green--you know how they go from green, round, and hard; to larger, flatter and yellow; and then to brown. I use the whole stem, leaves and seeds in my pickles. I do the same for dill vinegar--cram as much dill as I can into a sterilized wine bottle, fill it with white vinegar, and then let it sit in a cool, dark pantry for about six weeks. Besides making a great base for salad dressings, the dill vinegar can be poured over freshly thin-sliced cucumbers and onions with a bit of freshly ground pepper for a great salad.

Thanks for your quick resonse. I've been searching for over three hours for this answer. I am gardening again after being away for over 28 years. My dill has actually opened beyond this and in full flower but hasn't reached the seed stage - do you think I should still grab it off?

Linda,
Not knowing what variety of dill you have, I am only making a guess, based on my past experience. I have found that dill that is in seed, even in the first stages (green seeds, round and hard) has more "dilliness" than dill in flower or in seed harvesting stage. Why not take a small bit, taste it and see what you think?
Actually, I am eaten up with envy about the stage your dill has achieved. Ours here in Texas is just about 2" high and showing no promise of being of use for about another month, at least. You are the object of "dill envy"!

Dill can be mammoth dill, fern leaf dill and regular dill. They all produce the same things with mammoth dill being 5 foot tall or more, fern leaf gives more leaves and is slower to produce seed heads. The regular is common and they all can be used. Ideally, you use both the green fern leaves as well as the seed heads. I pick the seed heads when the seeds are still swelled and green color. Later on they do turn tan color, and then drop into the soil if not picked. Usually you can leave the dill seeds in soil and they will sprout the next year. For pickles, try an option of a half sour, using a Mrs. Wages Dill Pickle mix, as the flavor and salt source. Just add enough water to make a string brine, then add VERY FRESH pickling cukes that have been washed and the end tips removed. Once they 'ferment' only about 3 days at room temperature, add a tablespoon of white vinegar and store in the fridge for up to a year. I have three half gallon jars there now and even by ths year June they are still very crisp. I also add several cut up cloves of garlic and plenty of the dill weed and whole seed heads. If making with a vinegar based brine, add a teaspoon of food grade calcium chloride per quart of pickles. Ball made a product called Pickle Crisp, but discontinued it about 2 years ago, so you can find it at Bulk Foods. This buffers the acidic vinegar and keeps the pickles crisper longer. See the Harvest forum for more info.