packaging peanuts are easier to "mold" around the deli cups, but newspaper is free and a little more time consuming ( not much LOL) to help secure the deli cups. I have used both and if I run out of peanuts then I just use newspaper.
From years of shipping reptiles I have learned that news paper is the better of the two... It provides a much more stable platform for the conainer being shipped... Also its true, packing peanuts do insulate better... Infact, they will create a barrier between the heat pack and the container so the container will not get as much heat as it should... The news paper or peanuts are to keep the container inside the box stable during shipping... It is not for insulating the animal... That is what the styrofoam walls are for... Out of the two, newspaper is the best IMO...
Can't say we've had a problem with the heat pack heating up the container full of styrofoam peanuts, one of our recipients measured the temp. insisde of the box, which was raised 16 degrees. We also prefer the extra insulation, personally. The peanuts keep the deli cup stable just as well. To each their own