Stay away from the "mixed wood" pellets from Lowes unless they're specifically made for BBQ'ing. If they're heating pellets you don't know what kind of wood, lubricants, other chemicals or anything else that's in them.
I have used both blended pellets and 100% Flavorwood pellets. Blended pellets (such as an oak/apple blend) work absolutely fine in the tube, BUT... I you want the best flavor, then stick with 100% flavorwood pellets. The difference is noticeable IMHO.
The tube is so efficient that it doesn't cost that much to operate it.
BBQ'rs Delight also makes 100% flavorwood pellets, which is what I use.
I get mine from BigPoppaSmokers.com, because they have the best price I have found: $7.98 for 2 - 1lb bags with free shipping for orders over $40. He also carries the pellet tubes for the same price, so you might save on shipping ordering everything there.