disclaimer: My experience spans all of ONE season of planting seeds. I started out with the peat pots, not terribly expensive,(they seemed like the most likely thing to use, it is afterall what plants I have bought came in)... Later I ran out of the peat pots and went to the dollar store for styrofoam cups, meanwhile I have also re-used plastic containers from other plants and the trays that the 6 pack plastic thingies sit in...I had some with only small slits on the bottom, not the more open criss cross ones... anyway...the plants that were started in the peat pots are noticeably smaller and less developed than the ones transplanted into plastic. I'm convinced if for no other reason :)

I, personally, use newspaper pots made from old telephone book pages, just wrap the paper around a couple of fingers to make a cylinder and put one piece of tape on it to hold them together. They have to be stacked close together after you plant the seeds, since they'll lean, but they're easy to water from the bottom. No need to water the surface at all. There's another way to do it, too. Use small paper or styrofoam cups with the bottoms cut out. Turn the cups upside down so the small portion is at the top and punch a couple of drainage holes on the bottom sides. Fill with planting soil and plant your seeds. When it's time to set out the transplants, use a spatula to keep the bottom soil in place to set them in the planting hole. Then just carefully lift the cup straight up and pack the soil around the root ball. Nothing surrounds your transplant then.

I'm not happy with the peat pots or pellets either one, I've always found them either too wet or too dry with no happy in between for me. If you don't need whole flats of seedlings, you can still use a seed starting medium in plastic pot - plastic that doesn't dry out or the reverse, wick the moisture from the sowing medium - and away from the seeds. I think even newspaper pots would work better for you, and they break down reliably and quickly if you transplant seedlings directly in those, more quickly than the peat. Lots of instructions online showing how to make them. If you start with clean tools and pots, sterile medium, and have some air circulation after germination in the area of your containers, you shouldn't need the hydrogen peroxide.... Here is a link that might be useful: One of many previous discussions of peat pots

Do you mean you want to make discs that would expand when watered for use as pots? If so, that might just work to an extent. Paper pulp is best fresh. If you dry it out and then re-wet it you have to work it a lot in order to get the orig. pliable dough texture back. I think that feature, which is annoying when working on art projects and making a lot of pulp in advance, would be useful for pot discs. A disc that wasn't over-watered would hold up pretty well for a while probably. I'm not sure if it would expand with the same quickness and loft that peat moss discs do though. Also you will likely encounter some mold (ever try starting seeds in a glass between the side and some paper towel so you can watch the seeds sprout? that yellowing you get along the top of the paper after a while you will see on the paper pulp pot) within a couple of weeks (sooner in a covered flat, which will also likely spore and smell). If what you wanted to do was make pots out of paper mache using paper pulp, that will work just as well as any other pot. You'd need a sealant to keep the pot from dissolving though. I'm planning to do this myself, but with papercrete (paper pulp, dirt, sand, small stones, and perhaps cement) so I get a carved out stone look to the pots. Now I'm curious as to just how well newspaper would work as expandable pot discs. I think I'll make some and see what happens.