I use sponge filters on some of my tanks. I think they work quite well. Just set the sponge on the bottom of the tank. No need to place under gravel.
When needed just rinse well in the water that you are changing. imho Debbie

See if I have this correct you want to place a piece of "sponge filter material" under a UG plate or use the same material instead of a UGF

Here are some things to consider a UGF works by having a good air flow through the substrate and below the filter plate.

If you use a sponge material it will clog up extremly fast and it will cause massive bacterial problems by polution.

Keith

Unless your have a very heavily planted tank, with lots of well rooted LIVE plants to absorb the nutrients being sucked down by the UG, they are disasters just waiting to happen.

If you lay sponge under a UG, you will end up killing your fish just that much faster.

Sponge filters are great for clearing water and have made all the difference in the ability to rear fry without losing them in filters, but can't replace a good HOT or canister for circulating it through purifying media.

With sponge caps for the intakes, any decent power HOT filter will keep most any tank healthy, but no filter, regardless of type, will substitute for regular water changes.

Change often enough, and it may really not matter one way or another.

The main difficulty you'll have is not the filters, but the small size of the tank. Don't keep more than a Betta in there, and they tend to like still waters, so make sure the filter doesn't churn the water too much. If possible, move up to a larger tank.

Thank you for all the responses.

Yes, the tank is very small, but I know I can only keep one or two very small fish in it.

What I really wanted to do was NOT use the undergravel plate that came with the aquarium and get a small sponge filter, like the Jr. Dirt Magnet, instead. I wanted to be able to cover it with a thin/single layer of gravel for appearance, but wasn't sure if it would still function properly. (Hence my confusion about whether or not I should try burying it under the plate.)

So I did lots of searching and found the article that is attached below. It describes exactly what I had in mind.

Getting rid of the undergravel plate will give my fish just a little more room, since that plate takes up some valuable real estate in such small quarters. (Likewise, filters hanging in or out of such a small aquarium would take up too much room and look awful as well.)

So the sponge filter under a little gravel seems the way to go. Besides, I like the look of bubbles floating up and I think the low hum of a small air pump is kind of soothing.

Thanks again for the advice. Hope you enjoy the article below as much as I did.

Here is a link that might be useful: Miniature Aquariums article