Long before recorded history, so it's impossible to put a date or place on it... probably shortly after our remote ancestors got tired of paddling the raft, or even the log...

Archaeologists tell us the first sign of sailing ships appeared in Egypt or Mesopotamia around 3500 BC. They also tell us that the Egyptians used "sailing ships" to transport people and goods on the Nile. These ships were generally made out of reed and also used oars. One reason for the use of both oars and sails is the fact that (even to this day) one can not "sail" upstream on the Nile... because its narrow banks prevent "tacking" (the technique a sail boat uses to sail against the wind) and the fact that strong winds always blow from north to south - while its strong current always flows from south to north. So the clever Egyptians sailed upstream, by hoisting large sails, and then drifted and rowed back down the river.
In 1200 B.C. the Greeks were all over the Mediterranean. They made very big cargo ships (some in fact, recently discovered - intact - in great condition - at the bottom of the sea. By 500 B.C., sailing ships were being built with two masts. These ships were about 100 - 150 feet long and could carry 100-300 tons. Around 100 B.C. Roman ships were the largest merchant ships; they were 180- 200 feet long and 45 feet wide. They could hold 1,000 people plus a 1,000 tons of cargo. These Roman ships were very unique as they were designed to carry people in addition to cargo. No other boat prior to this were designed to just carry passengers - other than crew.
In the 1000's - the Vikings took their place in the Atlantic ocean. Vikings rode on their famous long ships. They were about 80 feet long and 17 feet wide.
Really large ships were constructed in imperial Rome, capable of loading up to ca 1000 tons. A famous large ship of antiquity was the Syrakosia of Alexandria, a three-masted royal ship, about 70 m long.
Large ships were also made around 1000 AD in China, also loading up to ca 1000 tons.
In the Mediterranean, the square sail disappeared in the 6th century and reappeared in the 14th century. In the mean time, the triangular lateen rig was dominant.
Until the Middle Ages, all Nordic ships were clinker built using the shell-first method. The logs were split radially, and had to be shaped with an axe. Only later, (after the invention of the saw) were "planks" sawed.
The changes made in vessels as a result of the invention of the saw - were dramatic. As a result, the carvel-built hull was developed - which from the 15th century was necessary for warships to support guns. Carvel-built ships were usually built with the skeleton-first method and sawed planks added.

Here are some great links for more information:

http://www.kingtutshop.com/freeinfo/egyptian-boats.htm
http://www.abc.se/~pa/bld/tradbld.htm
http://query.nytimes.com/gst/fullpage.html?res=9F02EEDD1530F932A05753C1A9669C8B63

Good luck on your report.

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Happy & Safe Boating!