We use this technique all the time for small scale purification. We call it prep. TLC. Usually we use a whole or half plate (20 cm x 20 cm) and apply our compound in a line about 1 cm from one edge, as you described. The thickness of your plate will determine how much sample you can load. For the analytical thickness plate (0.5 mm SiO2, I think) you can load up to about 20 mg of product. It's a nice technique because you can often get better separation than you can with a flash column and without the cost of a prep. HPLC. Also, flash chromatography can get a little bit iffy on very small scale; you tend to lose your stuff if the fractions you collect are too dilute.
There are several methods for loading your sample onto a prep plate. The "painting" method described above is one, but I prefer taking the end of a glass Pasteur pipet and bending the glass to about a 60 degree angle and then pullling the glass at the end to a fairly sharp point. Then you can use this to transfer a solution of your sample in ~250-500 microliters of dichloromethane (in a small glass vial) onto the prep plate by draging the sharpish tip of your spotter along the plate. Capillary action should do all the work for you. It's a bit tough to describe the technique in words, but once you get the hang of it you can load a plate pretty quickly.
One other point: once you scrape the band that you want off of your plate, it is sometimes preferrable to stir the silica gel rapidly with a suitable solvent (usually dichloromethane or EtOAc) for about 20-30 mins and then pass the slurry through a filter (cotton plug, usually). This is preferrable for relatively polar compounds that might stick to the SiO2 more than usual.