I'm sure you will get many answers to this. I originally tried empty pails of kitty litter. Too small - they hated them. We ended up building nest boxes that are about 16 inches wide and 16 inches tall. I hung curtains 2/3 of the way down. They love it. Most took right to them and the few that didn't I placed in the boxes when they started nesting, and they got the idea. Today all use the nest boxes except the first that started laying when we originally had the kitty litter pails. But she's spoiled and I give in to her. She has her "special spot" in the coop corner, and I just haven't tried to break her of it yet.
I use pine shavings on the coop floor and in the nest boxes.
Hope this helps.
Penny