If your home depot carries promix then try using that. It's excellent for seedlings. It comes in a very large bale and will probably last you for as long as you grow from seeds (assuming that's all you use this for).

When transplanting after they're mature enough (3-4 weeks) you can put them in just about any soil you want. Fox Farms is the best, but Miracle gro can be used too at this stage.

As far as the tap water goes, you should be fine as long as the ppm is low enough.

Alot of people don't even let their water sit for days to let the chlorine evaporate. It's more of a personal preference it seems between growers. I haven't noticed adverse effects from using tap water.