Mine prefer cotton or flannel sheets or the occasional snooze on the couch
. When we've had pups in the past we always used newspaper with a couple of small blankets (small enough that a pup wouldn't get lost under one) and kept them in a big, plastic child's wading pool and then sectioned of an area of the room when they grew big enough to climb out of the pool. When they outgrew the pool we kept a sheet of heavy plastic under the newspaper to protect the floor. If they were kept outside we would use straw for all the reasons given by others on here but it is too messy for in the house.