Ah! My favorite topic. I strongly believe that messing with roots on annuals you've just started (in other words this ain't trees in pots) is a mistake, so I never mess with the integrity of peat pellets. There is nothing about them that will harm or hinder a seedling that's sending out roots into another medium. There isn't a root (nature's mighty hydraulic machine) growing on this green earth that will be slowed down in the slightest by that nylon mesh. When you pull the plant later the pellet will probably be completely intact but surrounded by roots that are ignoring it.

That said, many people play with their little roots a lot and it works out just fine, but those guys are experts in all that. They know what kills and what encourages. I would never recommend stripping the pellets, but for you this is an opportunity to see which way works best with the way you do things.

There are two main limitations of peat pellets that you should remember. One is that they drain so easily that they can dry out too easily, but being surrounded by a transitional medium in the Dixie cups negates that. Secondly they have low nutritional value, so a transplant into something once the roots start reaching out is usually a good idea.

Wow, thanks for that! I always assumed the netting had to be removed eventually. As far as transitioning to Dixie cups, could you confirm covering the legs of the seedlings completely? And, potting soil or mix ( or doesn't matter)?