@Sara007 - You can easily make pillows out of the polystyrene foam beads if you have enough of them. You seal them inside the pillow and a liner should keep your pets and children from being exposed to the material. Now, if you want to recycle the shipping supplies you are going to have to call your local recycling depot and ask if they take it.
In our city we have two recycling facilities and only one will take polystyrene because it is so difficult to recycle. Basically it gets melted down into smaller blocks and sold as a fuel source. Unfortunately a lot of cities just toss polystyrene into the landfill to save on recycling costs.