Add XML Sitemap Plugin

Use the same process to add this plugin. Plugins>Add New then Search.

Enter the plugin required and click on Search.
This will search the plugin directory on WordPress.org.

A number of plugins meeting the search criteria will be listed.
Make sure you find the right one by Denis de Bernardy and click on Install in the right hand sidebar. I'll explain why shortly.

This will open a description of the plugin and other relevant information.
Click on the red Install bar.
The plugin will self install. Activate the plugin when prompted to do so after installation is complete.

The XML Sitemap plugin has the advantage of producing both a coded version for the SE spiders to read and a version for humans. A major advantage, and the reason that I recommend that you use this plugin over other sitemap generating plugins, is that they usually require you to take the file and submit it to the search engines.

Whereas this plugin also pings the search engines whenever it changes to reflect the new content you have just published. So additional posts and pages are automatically notified to to the search engines as soon as they are published.

A second advantage is that when it is used with the Semiologic Pro package it also produces a visible sitemap page for your human visitors. Yet another reason for going straight to Semiologic Pro.