Ditto Spice Girls. A 50# bag lasts a year here with 12-26 chickens at any one time. A little goes a long ways.
ETA - I use a "flour sifter" from Wal-Mart for about $2 to spread it in a very controlled manner on shavings and the poop board or anywhere else I want it.
There have been many threads about whether food grade Diatomaceous Earth works for whatever purpose. Those who use it swear by it. Others think it's useless and prefer chemical means of controlling bugs and internal pests.
It does keep down small insects and smell. Added to feed it does keep down internal worm infestation and its effectiveness is not cut down if it's wet. I've done tests with dry and wet DE with slugs and worms and watched them die in wet DE just as well as in the dry powder. The tiny diatom shells work when they're wet.
It's not a toxic chemical. However you shouldn't overuse it and have a lot of DE dust in the air and breathe it in.
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Depending on how heavily you use it in the coop, a 5# bag should last you a month or more. I buy the 50# bags and store it in a rubbermaid tote. Kept dry it doesn't go bad in any way.