I, too, used clumping litter for a number of years with my ferrets, and
while I never had problems with respiratory or other physical ailments, I
found the litter scattered everywhere and was very hard to clean. It would
get into every crook and crevice and I know it won't come out.
 
As far as the physical problems with clumping litter, I believe it expands
to 13 times its original size. Now just figure what would happen if your
fuzzy snuffed it up his nose or got some stuck to his/her rear!
 
I've found the best litter for my multi-ferret household is the pine pellet
litter (one brand name is PineFresh).  I know people have had difficulty in
getting this sometimes, but PetSmart is now carrying a brand of it (20 lbs.
for $8).
 
Amy & Dave (and their gaggle of giggling ferrets)
RIP Ian and Elektra
[Posted in FML issue 1578]