I try to take the smallest hunk I can that will do the least amount of damage to the seedlings. Maybe an inch to inch and half square. I may have only 3 or 4 seedlings in a hunk or over 10 seedlings. It depends how heavily I've sown them. I usually use an old butter knife. And yes, you have to watch the seedlings on the edges "rip" apart and probably die. You have to get over that.
Once you've done it this way you will never go back. Way to hard to try to save every seedling.

Hunks o seedlings works great if you are planting in a new bed where everything goes in at the same time. It also works if you are planting in a bed with existing plants that are small or slow growing in the spring. Where you might run into trouble is if you put in your hunks o seedlings in an existing bed where the surrounding mature plants take off and completely cover up and shade your new seedlings before they get growing. Then they won't do so hot and may even die.

For most things I usually tip out my container and use my hands to rip apart the hunks and then plant them in groupings of at least 3 about 6" apart. Then the hunks grow together and look like one large plant quicker. You only really need one seedling to survive in each hunk to get a plant. As long as you have plenty of seedlings to work with you can be pretty rough. Grasses often work best with bigger hunks since they can be slow to fill in and get good sized.

For truly special plants where you only have a few seedlings I do like to grow them on in pots for while. This works well for slow growing things when your desired planting space for them would surely get overgrown by its neighbors.

It is just a little extra work to monitor a few potted up plants in protected spot over the summer and then plant them in the fall. Things that don't get planted in the fall can be sunken in the ground until the spring to help them survive the winter. I end up doing that with at least a few things each year, mostly tree and shrub seedlings.

Below are some pics from my first year way back in 2008 showing how the hunk o seedlings fill in quickly. They were just planted in early May in the first pic. The bottom half of the bed in the second pic is that same area in late July which was entirely hunks o seedlings. The third pic is another bed in June with mostly annuals that was also planted hunk o seedling style in late April.

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I do not worry about the individual seedlings. I treat the original hos like it's a pan of brownies, and I'm setting a table for desert. Just like lawn, it's a single thing. "Tufts" and keep moving.

Sometimes when I'm in a rush, I plant the whole brick right out of the milk jug and into a single hole, like a paver. = done.

Thanks, everyone! You've convinced me it's worth doing. I can get so much more done if I'm not teasing apart thousands of seedlings and potting them up and then planting those weeks later.

Molanic, those pictures are amazing. Wow! I wanted to thank you, too, for making the point about where the HOS approach might be weak. As it turns out, I'm primarily focused on a bed I am re-doing. I planted dormant bare-root shrubs in late October and there are only a very few other plants still in the bed. This will be an excellent use of the HOS. But it is good to have in mind for my other beds with more established plants.

I think 'teasing' them apart does more damage than just cutting them like brownies with a serrated knife. The outer edge seedlings will probably die off but the center ones will be protected until they can grow once transplanted.

I have always planted my milk jugs very heavily (unless I buy the seeds) and do it this way every year. I also plant them all in the same nursery bed and then once they are up and growing, I move them around. This is usually in the fall, but often I don't move them until the next year when I need the space for new HOS.

One more thought on the size of HOS:

For things that really dislike transplanting (like poppies, for example), I make the HOS bigger, and I plant out when the seedlings are smaller. I think both of those things tend to minimize transplant shock.

That's great advice, Wesper, thanks!

I'm planning to plant HOS-style but I would still be interested in hear how well it has worked for other people and what they did. Bigger hunks of smaller seedlings for those that resent being transplanted is a great tip.

If the seeds in a container have germinated lushly, I cut the container (one gallon water jug) in 4 parts and plant out.

I found that if I plant them, let them get a little bigger, and then transplant, they seem to do better.
But that depends on how ambitious I feel!

I never tease them into single seedlings.

The best thing is for you to experiment and see what works for you.
You won't fail.