I usually let the seedlings get a little bigger before transplanting.. seedlings stretch a little regardless of light height or intensity, and I like them to get that out of their system before transplanting... then I bury the plant so I dont see that leggy base.. always worked for me.
A good way to avoid disrupting your roots when do transplant out of the cups is to "plant the cup", pack the dirt in (not tightly, just enough to hold the form) around the cup, then take the cup out, remove the cup and put the solid cup form of dirt back in the hole.. the roots will appreciate not being dislodged.
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