Nancy Fratti wrote (in 960127 MMD, repeated in 990816 MMD) that
the styrofoam peanuts are not a good inner packing material. One
reason for this is that they are now usually made of starch instead
Polystyrene foam is chemically rather inert, and it has a good amount
of strength. The fluffed starch is hygroscopic (it attracts water)
to a degree, and is liable to turn into something more like mud or
dried flour paste. It is also more "biodegradable" which means that
critters might try to eat it.
The peanuts sold by U-Haul are definitely made of starch. I cannot
recommend them for packing anything.