Budgie Breeding Questions from a Newbie

Hello fellow budgie-lovers:
I have a nice big flight cage with 12 budgies in it. I have one pair that have shown an obvious interest in "taking their relationship to the next level". I got a nesting box yesterday, but I haven't put it in the cage yet-----what next? What should I line the box with? What else do I need to do to encourage them to nest? Do I need to worry about the other birds disturbing them?
Any advice would be greatly appreciated!