Diatomaceous Earth (DE) is composed of the fossilzed remains of diatoms, which are single celled algae found in plankton and composed mostly of silica. When ground up looks and feels much like baby powder. The food grade quality is used in toothpastes and and sometime to de-worm animals, and also used in grain silos kill bugs.
"Diatomaceous Earth is almost pure silica (with some beneficial trace minerals); under a microscope, it looks like shards of glass (glass is made from silica). On any beetle-type insect that has a carapace, like fleas and cockroaches, the DE works under the shell and punctures the body, which then dehydrates and the insect dies. DE is totally nontoxic. There is no buildup of tolerance like there is to poisons because the method of killing is PHYSICAL, not chemical."I have found some articles where it has been used to kill bedbugs, but an article at All Bed Bugs indicated if they sense the dust, they will try to avoid it and there are also further precautions to take if considering for indoor use (which I personally would never do - would recommend leaving it up to the professionals).
It could be a good alternative for using for outdoor pest control of many insects and doesn't seem any more expensive than commercial pesticides. Just be sure to only use the food grade, not the chemical grade used in pools, wear a mask to avoid inhalation and gloves as it can dehydrate you.
For more info visit Lifehacker, Allbedbugs, Buzzle, Wolf Creek Ranch