I've tried chamois butter and a couple other and ended up using bag balm. It's cheap, works and washes out. You can get it at the drug store and it comes in a green tin.
+1 on the Bag Balm, and that's after a lot of experimentation. You can't beat the price either. If it's a hot day, I also use corn starch. For shorts, I am using PI Ultrasensors right now. They breath better than their Microsensors and have less of a diaper.