Right. Having the seeds under a little 'dirt' keeps moisture on the cap so it can come off by itself. I've just started a new technique for my starts. I germinate with the paper-towel method. Once the tails pop I put the seed in a small pot with peat (just put it on top). Then, I sprinkle some...
I bought mine from a local garden center for 99 cents each. They had about 10 varieties of hot peppers, no super-hots. All of there tomatoes and peppers are 99 cents. The plants were about 6" tall in a 2 1/2" square pot.
Check out CCN for their selection ... $2.00 and $2.75 each if you pick up...