I only use block cheese. I have several problems with the prepackaged stuff, namely the white, powdery substance on it that makes me think it is moldy. It is cellulose, which is a plant fiber and is used to make paper...grosses me out! In addition, it is difficult to digest. Plus, the block stuff is cheaper and tastes so much better, especially when it is melted. It does not take that long to grate, but if you like the convenience of the pre-shredded cheese, buy a block of cheese and shred it all at once. Put it in a ziploc bag and sprinkle a little bit of corn starch on it.
When grating cheese, it is easiest to grate when it is hard, so don't take it out of the refrigerator until you are ready to grate it. Or, pop it in the freezer for a few minutes before you grate it. That way it won't gum up on you.