For a two-stroke, regular house insulation will work fine. I've used it for years, and I typically get 15-20 hours between re-packs before the insulation becaomes burned and hard. The dedicated packing material may last slightly longer due to longer strands and higher density, but it costs far more. I can repack my silencer half a dozen times or more with house insulation for what it costs to repack once with genuine packing fiberglass.
Don't use house insulation in a four-stroke. The higher exhaust temps will burn the packing out very quickly.