What factors should I consider when deciding what kind of litter to buy for my cats litter box?

If he is going #2 outside the box, trying putting it in the box uncovered. See if he will get the idea. Or try 2 litter boxes with different kinds of litter. Scoopable litter seems to be good for most cats.
Good luck. :)

Return it.

Save money and buy one of those large dome litter boxes. Cut some carpet strips and lay them on the steps where they come out to catch the litter.

Or is it because you don't like to clean the box and have the box do it for you? Sorry can't help you there but return and buy another one / exchange it

Walmart online

Worlds Best Cat litter is a great litter, all natural made of corn. Sometime you can find a coupon online

http://reviews.walmart.com/1336/17299039/deserts-sands-natural-sand-cat-litter-15-lbs-reviews/reviews.htm

Natural Cat Litter by World Best Cat Litter 100 Natural

Did you try this site...
http://www.catlitterboxes.net/product.php?productid=2422&cat=207&page=1

Oh, I'm so sorry to say it has been discontinued. I usually buy my litter online, and checked all my sites, and this product is listed as either not available or discontinued, depending upon the online store.

Covered litter boxes are sold on many sites. I will send you a few so that you can compare prices.

http://www.petsmart.com/product/index.jsp?productId=2754444

http://www.amazon.com/Petco-Jumbo-Enclosed-Litter-Box/dp/B003WK0C6C

http://www.petco.com/product/14405/Petmate-Jumbo-Pearl-Hooded-Litter-Pan.aspx

http://www.nextag.com/enclosed-cat-litter-box/products-html

Self-cleaning litter boxes are increasing in popularity and are available at most local pet supply stores in your area or online. Here are a few places for you to search and compare.

http://www.littermaid.com/

http://www.petco.com/product/100832/ScoopFree-Automatic-Self-Cleaning-Litter-Box.aspx

http://www.litter-robot.com/

I prefer uncovered litter boxes. Some cats may become claustrophobic in a covered litter box, giving them a sense of being trapped. Although covered litter boxes may seem like an appealing method of reducing odors throughout your home, consider how your cat will feel. A cats sense of smell is much stronger and more sensitive than ours. Lastly, covered litter boxes can trap a lot of dust. This may seem advantageous; however it is quite the opposite. The dust can be very difficult on your cats lungs and become very unhealthy.

Although the scented option is appealing to you and your family, it may not be for your cat. Most cats tend to prefer a non-scented litter.

Is there any chance you have recently switched brands of litter? Cats can be extremely particular when it comes to what kind of litter you put in their litter box. If you find one that works, you should stick with it. No need to fix something that isn't broken.