i don't think peat pellets are too bad...i used them to start my first batch of plants, and after reading what stinky had said about the roots not penetrating the mesh too well, i dissected the root balls of the plants we just harvested. the roots appeared to have penetrated the mesh just fine, but perhaps the mesh gives them a slow start initially. The reason I don't like the peat pellets is because they dried out too quickly in my experience.

As for the pots, I use those for everything now- seeding and cloning. When I transplant I just water the pots so the peat gets soggy, and I tear away as much of the pot as I can without pulling off the parts that the roots are adhered to. If you cut the bottom of the peat pot off you are going to damage A LOT of roots, no question about that. Just water your plants with some root stimulator when you transplant, and they will be fine. I always have amazing results just after transplanting my babies, so if you follow my advice hopefully you will too!