The following is a reprint of a good article on handling growing media.
How a mix is handled can affect the air and water content of the mix. Compaction is an important factor to consider for plant root health when handling growing media. Air space that results in good drainage can be cut in half or even eliminated by compaction. To minimize compaction, containers, cell packs and plug trays should be lightly filled and the excess brushed away. The media should not be packed down, tamped down, or the filled pots tapped down on the bench several times, and the pots and trays should not be stacked directly over one another.
Another consideration is the moisture content of the mix prior filling containers. When water is added to dry components such as peat, they hydrate and swell. This swelling helps to create more aeration by preventing the particles from nesting within one another. This is especially important in plug production. Water should be added to the mix before it is placed into the container. It is best to moisten, then mix and then allowed to set overnight prior to use. If that is not possible, waiting at least a couple of hours after adding the water will help the hydration process.
How much water to add to the mix? For peat-based mixes for large containers and bedding plant cell pak production use 1 water:1 dry substrate ratio (50% moisture content). Plug mixes should have 2 water:1 dry substrate ratio (67% moisture content). The rule of thumb is, the smaller the cell, the more water to add prior to planting.
Information from the New England Greenhouse Update Website: