Ooh, I loooove this subject.
I use sea sponges, almost exclusively. I'm a reduce, reuse, and recycle freak, so I gradually made the switch from conventional pads, liners and tampons to the organic, eco-friendly disposables out there. Then I removed my IUD and my period nearly died away. Even the smallest of tampons became uncomfortable because I didn't have enough flow to soften it. Pulling a dry bullet of cotton out of my lady-hoo was painful, so I started looking for alternatives.
I used to have a friend who had worked as a sex worker, and her fellow workers had taught her to wear a sea sponge during her period so that she could work without interruption during her cycle--the sponge absorbs flow temporarily and compresses during penetration, so isn't felt by the penis. I thought it could work for my negligible period, and now I can't imagine using anything else. I have worn a sponge during sex with a man and he said he wasn't able to feel it, and I didn't feel it either.
I leave it in the same amount of time I would a tampon, and I usually take it out in the shower, so I can remove it and rinse it out with no mess. Disinfecting is easy. After rinsing, the sponge is stained and looks like it was in a car accident. I put it in a cup, cover it with hydrogen peroxide, and leave it overnight. In the morning it is pale and pristine again. I rinse it out and let it dry for storage or reuse. I buy them at Whole Foods or EarthFare, and trim them to a comfortable size and a shape that's easy to pull out.
As to the last question: it's not my own waste that bothers me, it's that with disposables, it sits around in the garbage can. I want it gone. With reuseables, the waste is for the most part rinsed away right away, and that just feels cleaner to me.
Thanks for the great topic.