Happy Medium
1. I would think that the most important consideration is the Specific Heat of the substance (How much heat it can absorb- but you knew that) because this is how it works. The Medium absorbs heat thus cooling the gases thus allowing a can with smaller internal volume to work. Water some of the best specific heat but I think that most of that comes from the "Latent Heat of Vaporization". When water is converted to steam it takes a tremendous amount of heat (970 btu/ pound of water). So it seems that in my suppressor, water is the quietest medium but only for a few shots.
2. Definately non corrosive. My Beretta is stainless and the can is titanium so I am not worried about water but would worry about anything corrosive.
3. Nonflammable- obvious reasons
4. I think that somewhat vicous would be a plus but I do have a problem with Lithium grease being too thick. Sometimes, the grease partially blocks the path through the can and the bullet will tumble. So I guess maybe thick enough to have some staying power (so it doesn't blow back in your face) but thin enough that it will drain out of the way of the bullet path after firing. -If there is such an inbetween.
5. Easily applicable- You gotta get it inside the can somehow. I have rigged up a 50CC syringe attached to stiff plastic tubing with the end plugged and two holes drilled 180 degrees from eachother. I put it in, squeeze and rotate 1 half turn, and then move to the next baffle. Takes about 15 seconds to charge the can in first three baffles (as recommended by AWC). So back to viscosity- too thick=hard to apply too thin=goes everywhere.
Best that I can do at 9AM. Did I leave anything out?? Have been experimenting with KY gel and it seems to be working pretty well. Slippery as hell though and it is more fun to use it for its intended purpose

I think that it has a high content of water which would explain its cooling capacity (specific heat).
disclaimer- I am a fireman not a scientist. If I have misunderstood any of the previous theories feel free to berate me and call me a buffoon.
Damian