When I first knew I was getting chickens the thought of using sand crossed my mind. I read this entire thread and after seeing so many positive things about it, I decided to put sand in the coop. I just have a 4x4 and used two 50 lb. bags of all purpose coarse sand ($3 at Lowe's) The chickies have only been out there for 3 days so far, but I am loving the sand! Especially with my small coop, I can reach anywhere with the kitty litter scoop and clean up is so simple. It just goes right into a bucket which will soon be going to compost. The only thing I had a problem with was the hanging water kept getting spilled so the sand got wet. Not really a problem though. I mixed some DE in and it dried it up pretty good. Now the waterer is sitting on the sand but I think I will get a block or something to set it on to elevate it.
You could use a bucket with the water nipples so they don't spill it everywhere.