I use mixed wood shavings and alfalfa hay for bedding. It appears to be working out very well, though truth be told, the alfala hay seems a little superfluous now that the girls are free ranging. I probably will switch to just the wood shavings for bedding when this bale of hay is gone. It attracts a lot of bugs & is a pain in the butt to mess with, and the girls seem to be fine with just wood shavings in some of the boxes.
Nobody is laying yet, though. We have old wooden crates for nesting boxes that sit on an old bookshelf we bought for $10 off craigslist and stuck it in the chicken run.