Diatomaceous earth is the silicious skeletons of diatoms, microscopic little critters living in seawater, like plankton. (Hey, I used to live where they mine it, in central California!) The skeletal remains are tiny, and sharp. It kills bugs by wearing holes in their exoskeletons. I'm not sure what makes it food grade or not, but either type will kill bugs. The food grade DE can be used as a food supplement, and will kill many types of internal parasites.
In it's natural form, it looks very much like chalk, but with pronounced bedding planes. Really good for finding fish fossils in, by splitting it apart on the bedding planes.
Hey Carnivore! Thanks for the lesson, but having grown up near Lompoc (DE capital of the world) I know exactly what it is. I also have a pool LOL! My question was more about whether the food grade DE will also kill bugs. It is a different color than your standard pool DE and appears to be finer ground. I was hoping the answer is yes. Also since I am fairly new to chickens I wanted to be sure that I shouldn't be using regular DE around my coop to kill crickets, as that could be harmful.