The first thing you should understand is the fact you cannot hope to duplicate named Phormium cultivars from seed. All Phormium seeds return either green or red solid leaved plants, with very rare exception. Propagation of variegated cultivars requires division or tissue culture.

Germination is a difficult and potentially lengthy process. While Phormium germinates at 60-65°F, it can take anywhere from 30-180 days. It can be hastened, and to an extent regularized by 6 weeks of cold moist stratification (damp media in the fridge, or winter sowing if you are in zone 7 or colder).

Phormium seedlings are extremely vulnerable to damping off. Great care must be taken to avoid it, and you can find information on techniques in the Growing From Seed Forum.

Phormium seedlings dislike root disturbance, so you should sow in individual cell trays or containers. Common seeding trays and pricking the seedlings results in large losses.

Good luck!

In addition to Donn's excellent info, I'd just add that despite its appearance, phormium is not a grass :-) It is an agave relative - a very architectural and densely fleshy-rooted flowering perennial.

I'd also consider posting your questions on the California Gardening forum -- as popular and as commonplace as these plants are there, I'm sure someone is growing them from seeds. We grew them in quantity at wholesale growing nursery I used to work for but they were grown entirely from TC'd plugs.