Most of my house experience is new construction with Habitat for Humanity and building the addition. I've done some work on the house before, and on other people's houses, but I haven't ripped open many walls.
So I was flummoxed when I found this material in the wall when I was working on the kitchen remodel. It's light and fluffy, and incredibly fragile -- the slightest puff of air, and pieces blow away. It's settled into the bottom of the wall cavities, so what insulating value it had is long gone. It had ties around it, as if it were in batts like modern fiberglass insulation.
And I have no idea what it is. I'm going to ask around on-line, but I've never seen anything quite like it. What's curious is that the only place I've found this in the house is in this wall near the bathroom -- and most of this wall is an internal wall, so it's clearly not for insulating against the elements. None of the external walls have any insulation anyways.
The large black pipe is the vent stack for the bathroom. It's a 4" cast iron pipe like the main sewer line.