I've had pretty good success with my seedlings, so allow me to offer my
two cents.

First of all, definitely sterilize any pots you're going to reuse this
season. A solution of 10 parts water to 1 part Clorox should be fine.
I don't know whether you really have to douse everything in sight, but
at the very least, sterilize everything that the growing medium, seeds
or plants will come in contact with.

Definitely get specially formulated germinating mix, NOT garden soil.
Of all the brands I've tried, I prefer the Germinating Mix from
Gardener's Supply Company. It's very fine and I've had great results
using it. Follow this link: http://tinyurl.com/3s3ml

While you're there, I also highly recommend investing in one of the APS
seed starting units. They come in trays with 24 spaces, as well as 12
spaces that fit perfectly on a sunny window ledge. This self-watering
system makes it so you only have to water your seedlings about once a
week. Letting them dry out is the quickest way to stunt their growth,
if not downright kill 'em! I know you mentioned trying to keep it
economical, but they're reusable year after year. Worth the $10, IMO.

I planted my seeds in my seed starting units this past weekend, and
already the Zinnias, Scabiosa, and Forget Me Nots have sprouted! No
tomatoes just yet, but it won't be long!

Best of luck this season.

-Fleemo