My apologies - I should have started a new thread with the question about DE and its effect on worms in composting and beneficial insects in the yard. Oh the challenges beginners bring !
BIG thank you's to all who shared their expertise despite my beginner's clumsiness ;0)
So after receiving what seemed like conflicting responses - one which said DE didn't effect the earth worms in their garden, and another which said it kills both good and bad insects - I did a google search and a little more research.
It turns out both are correct! (This site has wonderful info on DE:
http://wolfcreekranch1.tripod.com/defaq.html )
Apparently, DE doesn't effect earth worms, so it is safe to use your DE treated coop stuff in your composting/garden. Mix it in well with the soil.
DE **DOES** kill both good and bad insects in the garden. Use caution and your good judgement before applying it straight onto your soil/plants.
Because of the HUGE non-chemical benefits of pest and odor control, we are going to use food grade DE with our chickens - and our dogs and cats !
Now I just have to figure out where to get it ;0)