Always use horticultural vermiculite. Unless you are 100% positive that the insulation grade is not toxic and been treated with any type of chemical. I have never seen insulation grade vermiculite recommended for use in the garden.

"Horticultural grade vermiculite has become a mainstay as a component of soilless growing mediums, as a soil amendment and in many other horticultural uses for both the commercial and home grower. Use horticultural vermiculite available at garden/horticultural supply stores. Insulation grade vermiculite is often treated with toxic materials that are harmful to plant growth.

Vermiculite is the name given to a group of naturally occurring hydrated laminar minerals similar to mica. When processed in special furnaces, the mineral exfoliates (or expands) into the accordion like layered particles familiar to many as a part of soilless growing mixes. The processed product is sterile, permanent, odorless and non- toxic. It has the highly desirable characteristic of being light weight and the capability of moisture and nutrient retention.

Three Horticultural Grades
Strong-Lite produces and packages three grades of horticultural vermiculite, medium, coarse and extra coarse. The vermiculite is a light, golden color and is processed from imported ore. It has a bulk density of four to six pounds per cubic foot. The medium and extra coarse grades are used when higher aeration characteristics are required, such as amendment of sticky or heavy soils. The medium grade is widely used for plug mixes, finer graded soilless mediums, germination and rooting, and for domestic horticulture.

Vermiculite for Seed Germination
Medium grade vermiculite is used very successfully as a germination media. It can be used alone or mixed with peat. "Damping off" problems are virtually eliminated by using vermiculite when germinating seeds. Vermiculite germinated seedlings characteristically have a denser root growth which allows the plant to "establish itself" sooner. Vermiculite for Rooting Cuttings Coarse and medium vermiculite are excellent for rooting all types of cuttings. The product may be used straight from the bag, with no other additives.

Vermiculite for Outdoor Transplanting
Coarse vermiculite serves as an excellent soil amendment for heavy or sticky soils. In these conditions, it is popular to use up to one half the total volume (by bulk and not weight) of vermiculite in the soil to provide proper aeration and drainage. The product will amend light, sandy soils as well when used in the same proportions, providing improved moisture and nutrient retention. Vermiculite amended soil will help outdoor plant root systems to develop faster and penetrate the ground further. Two or three inches of vermiculite placed around the base of shrubs, roses, and garden plants will help prevent drying out and provide insulation for the root system against wide temperature swings.

Vermiculite for House Plants
Mixed half and half with natural soil or peat, vermiculite provides needed drainage and aeration for potted house plants. This mixture encourages a healthy root growth and an even spread of soil nutrients. Plants potted in this mix will generally require less frequent watering.

Vermiculite for Bulb and Tuber Storage
The moisture control and insulating characteristics of vermiculite make it an ideal medium for bulb and tuber storage. Pour a few inches of vermiculite in a clean container, then add bulbs or tubers in layers filled with vermiculite."

"Builders vermiculite used for insulation and soundproofing may contain pesticides, toxins, or asbestos that could be harmful to seeds and seedlings."

No offense to any journalists or writers out there---but one of the shoddiest and least reliable sources for "accurate technical information" these days is a journalist or a writer. Sometimes it outright borders on irresponsible. I've worked side by side with these guys, in a technical capacity, for over 30 years. Their area of expertise, which they do very well, is literary---not technical. There, I'm done ranting ;-)

With a little bit of time and a good search engine (Google Scholar, Become.com research), you can do a better job researching this on your own and with the confidence that accompanies that, draw your own conclusions.

Solid information, here, regarding things such as pressure treated lumber, pesticides and even construction grade vermiculite is not all that it could be. Much of it, though well intentioned, is anecdotal (with a few exceptions) and just doesn't stand up to scrutiny.

Some vermiculite, intended as poultry litter, may indeed be treated with water repellents. However, construction grade vermiculite is perfectly safe and acceptable for horticultural applications and has been used there with success. It is simply an extra coarse grade of the product.

If you are concerned that it may contain asbestos, your friend should be able to show you the stamp on the bag certifying that it asbestos free.

However, just because it's safe---and the price is right---doesn't make it a slam-dunk. The larger size of construction grade vermiculite tends to work better as a soil ammendment when better aeration is desired while the finer grade product tends to hold water better. Ultimately, I passed on an opportunity for cheap(er) construction grade vermiculite because water rentention, not aeration, was of primary importance for me. For what it's worth, I chose a medium/coarse grade of vermiculite the industry calls "glitter" for my raised beds.

haha my SIL is a high-profile journalist for a very large city's paper.

So...

Do I even need vermiculite? are there alternative mixes out there?

No, you don't "need" vermiculite to garden outdoors. After one gardening season using it, I'm still not 100% certain I would even recommend it. Everyone will have their own personal spin on this.

Many years ago, I was a disciple of the "Ruth Stout No Work Garden" method---sheet composting with hay. After a couple of seasons of decomposition, the results were excellent! My sandy soil grew unbelievably rich and dark. Any time the kids wanted to go fishing, they just pulled back some of that decomposing hay and scooped up all the worms they wanted. Unfortunately, I was the only one who found that casual look aesthetically appealing.

After several years of not gardening, I jumped back in last year. I decided to give a modified SFG approach a shot. The mix I used in my 10" high beds wound up being 25% vermiculite, 25% sphagnum peat and 50% compost (a local farm sells bulk compost and composted cow manure).

The garden was extremely productive for the amount of work that went into it, apart from building the beds, trellises and soilless mix---and---it was visually appealing. I intentionally didn't put in any drip irrigation, opting to hand water just so I'd have something to do ;-) With the hay mulch method I really didn't even water.

I don't know that the soilless mix was better than my old method but the results were excellent the very first year. I'm not so sure about having to add compost each and every year though---the beds have settled a good 4" from when I first filled them. Mixing in a couple inches of compost each Spring could get old quickly

Maybe my wife will approve of hay "in" the beds...

Good luck!