Thanks everyone for your advice. I started over: transplanted the basil plants, bleached the unit then started tomato, tomatillo, jalapeno, and bell peppers. Success!

I ironed the labels on and made sure they stayed on. Started to get a little bit of mold with the jalapeno, but I put a couple drops of hydrogen peroxide on the plant and all is well.

The tomatoes have true leaves, I'm going to transplant them today. As soon as the others have true leaves, I'll transplant them too.

After I started this whole process I realized that the Master Gardener kit is for growing seeds and keeping them in the Aero Garden. Today I ordered the Seed Starter kit that is for transplanting seedlings into the garden. I'll save the MG kit plugs for fall when I want to start tomatoes and grow them in the house through the winter.

I've not had any luck germinating seeds in a damp paper towel. Again, all I get is mold and no germination.

Thanks again for your help!
Ugsetta
:)

Also, you could always consider what I tried with my lupine. Since the seeds are bigger and had a hard coat, I decided to assist them in a way that I had read about, and added a little hydrogen peroxide to the bag to dampen the towel in lieu of water. Sure looks like it worked; we'll see how they do now that they're in the ground. Plus, H2O2 kills mold. And releases O2 when it breaks down.

And listen to grizzman: keep them dark. Light is bad for roots.