There have developed several techniques for the uses of cellulose in construction. Jay J mentioned Wet spray, but there are others, too.
There is Dense Pack or Par-Pack cellulose. Unlike wetspray, this is blown in dry behind a re-inforced poly or even a cloth film. It's blown to a density greater than settled density, there-by elliminating concern over settling.
Wet spray is where the spray a mixture of cellulose, water & adhesive and has producted several options. It has been used in new construction stud cavities, although there has been concern over where does the water go once the cavity is polied & sealed (Thus the advent of dense pack). It can also be used in commercial buildings, such as pole barns, using a stronger adhesive and being open blown right on the metal or other material. It is even used as a finished product. You can purchase cellulose (Though this is usuaslly not recycled) in a color & use it as the finished accousticle finish.
The most common use in of course attic insulation in an open attic. I's a less expensivuct, but calling it "Cheaper" would be doing a dis-service, because in many ways it's a superior product to fiberglass. The only legitimate advantage fiberglass has over cellulose in weight, and that is only an issue in extreme situations where construction is poor.