I tried the cloth bags, they might work well where excess moisture is a problem, but I had about the same experience as Greg; they dry out way too fast. I like the tan color, which doesn't heat up in the sun, but they are so dry that the plants are constantly stressed, even using saucers. I ended up finding plastic grow bags which fit inside of them. I also line unglazed terra-cotta with plastic. It's dry, dry, dry here.
@beenthere
Tina, I've used square plastic pots in 1020 trays, but plastic grow bags come in many sizes, pack together efficiently in trays, and are cheap, I'd recommend those for seedlings. I plant up to 9-12 seeds in a 3.5" square pot, but have grown as many as 25. Crowded seeds actually seem to sprout and grow better than those in sparsely sown containers. Far fewer problems with damping-off.
Edited to add;
I've posted these pics before, but I forget which thread. The seedlings were all grown together under lights and taken outside on most days to get sunshine. I've grown up to 25 seedlings in a 3.5" square pot, and they looked as thick at the base and as healthy after 6 months as their neighbors with the more typical 6-8 seedlings per pot.
It's OK if daylily seedlings are crowded, they'll grow fine as long as they have enough water and food. I prefer Dyna-Gro Foliage Pro, because it's a complete fertilizer designed for hydroponic use, and because it's low in phosphorus. It also contains calcium and magnesium, which are essential for healthy growth in soilless medium. (particularly coir). Any good soluble liquid fertilizer is OK though. Miracle Grow makes a lower-phosphorus soluble fertilizer, I think it's their Tomato Food. Peters has something like that too. Whatever you use, dilute it to half-strength and use it more often. You can tell if you're overfeeding if new growth is pale green & floppy. Strong light is essential.
When the seedlings get bigger, the pots will be a tight mass of roots. They'll dry out very quickly, and be difficult to re-wet, so they'll appreciate standing in a little water most of the time.
Here is what I use to protect outdoor seedlings, everything is a threat to the small ones.
