For the initial pot up I plant so that the cotelydons are just above the soil line. However, when I plant into the ground (or container) I don't generally plant my peppers as deeply as my tomatoes. Peppers are shallow rooted. If you dig them up at the end of the season there will be a big clump of roots at the base of the stem just below the soil line. There will be some root development along the stem, but not as much as a tomato plant. There is a central tap root on peppers that will go down fairly deeply everything else tends to spread out fairly close to the surface.
Randy
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