The best material to make a dog bed out of has to be durable and ideally washable, so I can recommend cotton canvas as the perfect fabric. It is durable, machine washable, and shouldn't get long claws caught in it. As for padding, this is age dependent. Memory foam is the best material to take the strain off an old dog's joints. For a puppy, you want them to be comfortable but they're so light and their joints are so flexible that an old pillow or cushion will do the job!