All of the above, but unfortunately the best wadding I've used is Pink fiberglass insulation. It has very good thermal blocking properties. Unfortunately it is not biodegradable........at all.
And if I ever caught anyone using it on my property the club would be looking for a new flying field... probably 95% of landowners you might be flying from would say exactly the same thing... Fiberglass insulation DOES work well, but it's an ABSOLUTELY TERRIBLE choice for wadding-- along with other "non-biodegradable" fibers such as pillow ticking and such... the stuff, once ejected from the rocket, will fall into the grass and remain there essentially permanently. The stuff will not rot... it will eventually make its way down to the soil surface and mix with plant debris growing over it and then dying and wash down flat on the surface by rain and snow, but it never really breaks down... It can kill livestock or wildlife that eat it inadvertantly before it washes down onto the soil. Just a permanent mess...
Foam plugs often used by competitors for ejection pistons is nearly as bad... that stuff takes FOREVER to break down unless you burn the field off... the only way I'd allow foam plugs to be used on my property is if they were securely attached to the rocket with a string to prevent their loss at ejection...
Regular paper wadding (crepe or the flameproof toilet paper type) breaks down fairly quickly, and while it's unsightly on the field until precipitation and wind moves it down into the ground cover plants (or they grow over it) it will eventually break down within a matter of weeks or a couple months or so, depending on the precipitation and climate in your area. The flameproofing chemical used is borate, which contains boron, an essential plant micronutrient, so it's actually good for the soil (of course there's only a trace anyway). What's nice is, you can actually pick the stuff up and reuse it... I've often walked the fields a day or two after the club has flown and picked up a ziplock bag of the stuff... it works great when reused, though it's usually perforated with small holes from burning BP... adding a clean unperforated sheet or two on top is a good idea, or just using a little extra of the burned stuff...
Lettuce, cabbage, green grass, etc. (green and juicy so it won't burn) works very well. These of course are instantly biodegradable and very cheap if not completely free...
Reusable wadding or wadding alternatives are generally nice and work with varying levels of success and efficacy... baffles work well (usually) but sometimes require one sheet of wadding just as insurance that the parachute doesn't melt or get singed from hot gas... though of course baffles usually aren't permanent and will eventually burn, weaken, or need cleanout from trapped particles of ejected debris from the motor, particularly "pot scrubber" type ones. Flameproof Nomex cloth squares work very well, and can be reused many times... eventually they get pretty dirty and need laundering. They usually have a buttonhole in the corner to attach them over the shockcord or to it with a small ring or another piece of string tied through the buttonhole to the shock cord.
Probably the slickest "reusable" wadding idea comes from Micromeister here on the forum-- Teflon tape pom-poms... turns out regular old white plumber's teflon tape, available at any hardware store, is flameproof and can withstand high temperatures.... a roll of tape, pulled into individual strips about 6-8 inches long or so, arranged in a starburst pattern with their centers all overlapping one another, then tied in the middle to make a "cheerleader pom-pom" will make a flameproof wadding alternative that is reusable... simply extend the string which ties all the ribbons together out long enough to tie to the shock cord, so they return with the rocket. 2-3 of these in a rocket work very well by all reports.
Then of course there's pistons, usually made from balsa, foam, or tubing that is undersized enough to slide easily into and out of the rocket body tube, but close enough to the size of the body tube to prevent hot gases and particles from getting around it and toasting the parachute... these work well (so long as their fitted properly) and are reusable due to being attached to the shock cord with string, or even being inline with the shock cord by having it pass through the piston... (presuming that the lower part of the shock cord is made of a flameproof material itself like kevlar that doesn't need protection from the hot particles and gases of ejection... )
Later and good luck! OL JR