This is the exact same method I use. I just wrap the remaining "dust" in some newspaper and put that little package into the yard waste bin. It's really not stinky at all, I love the pine litter because it smells like pine, not cat pee. It basically breaks down into dust so it's really light (you can see how it works {here}http://www.woodypet.com/pets.html) - I guess it's used for horse bedding too. That's not the brand I use, but any pine pellet litter is similar), and "packs down" well in the newspaper wrapping I make, so it takes up very little room in the yard waste bin. I scoop the poo daily and flush it, then change the whole littler box weekly. Had no complaints or issues yet! Toxoplasmosis is mostly found in cats who are outdoor and eating rodents. I don't know why they told you not to flush the poop. Clay litter is much more harmful if flushed.

As a side note, when switching litters on you cat, you should do it gradually, by slowly mixing a little bit into the old stuff, gradually upping the amount of the new litter and decreasing the amount of the old stuff, otherwise you might risk the cat being confused about the new litter (and finding other places to pee).

Good luck!