This article is from the Food Preserving FAQ, by Eric Decker firstname.lastname@example.org with numerous contributions by others.
From Kathy Meade
Salvaging Wood Chips for smoking foods
I never buy wood chips. We have an apple tree in our backyard and use the
prunings from that. In addition we use the prunings from a neighbor's
grapevine. My mother has a crab apple that needs suckers cut out. If you
look around there should be plenty of free smoking hard wood. It is just
another way of recycling and my neighbors love that I am willing to haul
their "trash" away. My sons cut the wood into pieces, we dry it in the sun,
and then pack it in plastic buckets that we keep by the smoker until they
are needed. Just don't use soft woods such as pine. Fruit woods are the
best, but hickory and oak are good too.