As I said about 1/3 of the way down from the top, the goal (at least in part) is to prevent sound waves from bouncing around off the bare wood walls. I'd suggest curving your pillow or whatever you're using around the speaker to block off the back, side, and bottom panels so reflections are minimized or eliminated. Just keep it away from the valve and chassis so air can circulate.
As far as what to use, try something that's already in your house for starters, a pillow, fibrefill from inside a pillow or duvet or out of some speaker you're not using, foam rubber, carpet pieces; and then see if you like the difference it makes, try more than 1 thing to see if that makes a further difference. Then you can consider buying something made for the job, or not. My VT30 still has a pillow in it and I'm very happy.