I use rice husks. They are small, soft, and the chickens can nibble while they are laying. Because it settles around the hen and eggs it sort of 'cradles' them. Three of my chickens lay their eggs in the same nest box and I haven't had one egg damaged despite the hens energetic 'rearranging'. The chickens absolutely love it as nesting material. I use it for bedding for new chicks too. It also makes great stuffing for dog beds (but needs to be contained in a tightly woven 'bag' inside the outer bed casing. It even dries quickly if it gets damp and as long as the chickens don't poop in the bedding, it still smells good when it dries and seems to resist mildew in the humidity.
I get it at the local feed store, it's packed tightly and 'fluffs' alot when loosened-much like pine shavings for horses.
OH also, because it's in a bag, it's easy to store, composts better than straw OR shavings, and I haven't noticed any dust from it. You can sift chicken poop from it using a wide toothed kitty poop scooper but it's so inexpensive and fluffs so much it's easier to just change it if it gets soiled.
Edited by momgoose - 9/8/12 at 7:30pm