Amp/Putnam/Miter-Mite offers felt pads to fit their machines, and a hard neoprene-looking material, too.
I prefer the neoprene-looking pads. Another joiner here likes to use the felt pads. Both work well in most cases, if the machine is properly set up.
John, I really like your idea of using plastic erasers -- I'm going to try that soon.
Crushing of mouldings is becoming more of a problem, as the woods become increasingly softer. There was an entire series from L-J that I removed from our sample panels, because the wood was so soft that if enough pressure was used to insert the v-nails completely (it takes about 35 PSI to drive my machine), then the top would dent.
I've also seen moulding made of wood so soft that it would not hold the v-nails; they would almost fall out, and the joints would literally fall apart if handled before the glue sets up.
The answer: Sell hardwood mouldings.