I've done the sponge thing in the past. You do have to have a lighter flow, it wouldn't work for someone with seriously heavy days. Also you have to check it regularly - if it gets too full and you cough or sneeze, to quote Inga Muscio "you get a big red how-do-you-do" on your undies. Some people also are concerned about TSS or the harvesting of them as well.
As to your questions:
Do any of you use them? I used to, but not for heavier days
Do you like it? Yes I did, it was comfortable
How's it work? Upon getting them, boil in water for three minutes (I"m pretty sure that's how long) and let dry. When you need to use it, wet it, and stick it in. When you notice it's full, take it out, rinse it out and either switch it with another one or put it back in. When you're finished, soak in vinegar/water solution and allow to dry (dry in the sun for stains). You can use them over and over to a point. YOu can boil them again too if you prefer.
What kind of sponge would I be looking for? Sea sponges. I've bought them from an arts/crafts store or you can buy them from Jade and Pearl
You can also wear them during AF DTD, if you're into that, but if it is full it can get squeezed out, if you catch my drift.
Actually I think I might try using them again. My flow has decreased quite a bit since DD was born and it might be a perfect solution for me.
Edited to say, that on the Jade and Pearl brochure
site they recommend not boiling them, as it toughens them and reduces their life span. But, I've never noticed much of a problem. They do have a life spane though.