I like the idea of water coming into the bottom and leaving through the top. As for media, you can use just about anything. Pillow Stuffing, for example.
But ...your powerhead had better be incredibly powerful. As far as I know, powerheads are not designed to deal with resistance (like the resistance that would come from gravity protesting water running straight up through a tube, or a cotton filter resisting water being pushed through it). Have you looked into the horsepower rating of an average canister pump?