Having the peat pots disintegrate does sound like you may be overwatering.

In general, sounds like you are overthinking this.  Seeds are plentiful and cheap, try several methods, try often.  I've started seeds in egg cartons (both paper pulp and styrofoam [with a drainage hole pricked in the bottom], ice cube trays, tin cans, soda cans, soda bottles, in mass in cake pans (cutting the individual plants apart with a sharp knife after seedlings are a good size), etc.  Not to mention direct sowing of dry seeds and seeds that I just started in damp newspaper until they first started sprouting.

I've used the newspaper pots, and they fall apart faster than the peat pots.  By 6 weeks, I had mostly little mounds of soil with roots sticking out and bits of newsprint.  Bret is correct - you can start seeds in any number of things.  My favorite is the little pastic 6-packs you bring home from the nursery with seedlings in them.  I also use 4" plastic pots, and have used flats that I built out of scrap lumber.    Whemn they are young, a lot of seedlings are quite tolerant of being dug up and repotted into bigger pots or the ground.  .