Polly had mentioned it might be helpful with gnats a while back, so I sprinkle it on top of my soilless mix when I transplant. It seems to help.
The molds I have had do look like what is on old bread, but also it does seem to interfere with germination. I had tried to mix in cinnamon, maybe a 1/4-1/2 tsp in a baggie when starting seeds and I realized that off the same seed lot, the one with the cinnamon seemed to have no dampening off, while the other without cinnamon had a blue mold. They seemed to have the same amount of dampness in the mix, so it didn't seem to be an overwatering issue.
I personally find the balance of dampness in seed starting to be touchy. If it is too wet, you have trouble, too dry and nothing happens. It may sound crazy, but for me the toughest lilies to grow from seed, the ones I have the most trouble with, are asiatics.
So maybe cinnamon is both insecticide and fungicide. I don't like to use a lot of chemicals in my gardening and once I realized that this helped in the mold issues, I continued to use it.
