Seed-starting is largely a "what works for you" type of thing, but there are certain guidelines that do help make things better.
Generally, tomatoes and peppers like the soil temp to be about 70 degrees F for them to germinate well (watermelons prefer 75 degrees).
Some folks will use a heating pad beneath the containers to keep the seedlings warmer.
I like to start them in 72 cell trays, 1 seed to a cell, and keep the tray just a few inches below a fluorescent shoplight. I start them in a mix of compost and dirt. I use the "cool/blue spectrum bulbs. I keep this up until I plant them, which is about 8 weeks from seed-planting. They should be up-potted during this period, but I don't (not enough room), so I just plant the root-bound plants. You could also just start them about 5 weeks or so before you plant them to plant them before they start getting root bound.
The method seems to work pretty well for me.