1. Like everyone else, I would rather knit with natural fibers as opposed to acrylic. However, I've tried just about every kind of yarn there is for making stuffed toys, and believe it or not, acrylic works the best. It creates a stiffer fabric, which helps to maintain the toy shape.
2. As for stuffing - I'm still searching for a heavier, more solid feel. Until I find it, I recommend a product called "cluster fiber" instead of the usual polyester fiberfill.
Use this (cluster fiber):
Not this (fiberfill):