I'm starting seeds for the first time this year too as something to do with my toddler and he picked TONS of seeds and we are going to just grow what he picked out. LOL. I have been doing research and found a "paper towel" method and have had great success so far with it. You should also check out the starting from seed section of the forum

As far as pots vs. ground, it is dependent on what you are planting. My recommendation is to look into raised beds on the ground. I am trying that this year with the kids along with my regular large garden. I made a raised bed for the two older kids and am letting them plant what they want in them. I made them 3' wide x 6' long. You can actually plant quite a lot in there. Especially, if you plan ahead and plant one crop after another. Also the LSU ag center has a great publication on their site. Search for the vegetable planting guide.