I usually let it settle really well then pour off about 1/2 of what is in the starter. There is still some yeast in suspension in the liquid so I don't pour it all out. I use the erhlemeyer flask. The shape makes it easier for me to pour out the liquid and keep the solids in the flask.
If you're pitching a fresh pack (tube, vial whatever) you will be perfectly fine with at least 5 gallons of 1.040 wort. You only need to worry about stepping it up if you are starting from a small volume and going to a big volume, like from a single culture to a 5 gallon, or a tube/ vial to 10 barrels.