In a large pot with a lid, slowly heat the milk with the vanilla bean seeds and the pod over medium heat until the surface gets steamy and begins to murmur. Some bubbles are okay, but beware a boil-over, which won't hurt the quality of your yogurt but is really a pain to scrub off your stovetop later. (For all you temperature-takers out there, you're looking for the milk to hit 180°F.)
Remove the pot from the heat, fish out the vanilla bean, and stir in the sugar if using. Let the milk cool just until you can leave your pinky finger in it for three seconds. (As Homa Dashtaki of the White Moustache told me once, don't try to be brave about it. It should be on the hotter side of warm but not uncomfortable.) This cooling takes a while—check after 15 minutes, then every 5 minutes after that.
Add the yogurt starter to the pot and stir once, just to incorporate. Cover the pot and set in the oven with the oven light on (or, alternatively, wrap in a cozy blanket and set in a warm spot (like the top of your refrigerator). Leave in this warm spot at least overnight and up to 36 hours. The longer it rests, the tangier it will be.
Lift up the lid to peek and give the pot a gentle shake. The yogurt should jiggle slightly, and some whey may have separated from it. Recover it and refrigerate until cold, 2 to 4 hours. (I find the texture benefits from this cooling before you portion it into jars.)
For a thicker, Greek-style yogurt, set a clean dishtowel or a double-layer of cheesecloth over a strainer set over a large bowl. Pour the chilled yogurt into the dishtowel, fold the edges of the dishtowel over the surface of the yogurt, and let drain in the refrigerator for 4 to 6 hours. (Any longer and it will become very very thick—which is not a bad thing, but be forewarned.)