So what exactly did Mary lay her swaddled baby in?

A more literal translation of the Greek word for manger is “feeding trough.” From that we can further deduce that Joseph and Mary were staying in the section of the shelter that accommodated travelers’ animals.

When Christ entered the world, He came to a place that had some of the smelliest, filthiest, and most uncomfortable conditions. But that is part of the wonder of divine grace, isn’t it? When the Son of God came down from heaven, He came all the way down. He did not hang on to His equality with God; rather, He set it aside for a time and completely humbled Himself (Philippians 2:5–8).

Furthermore, the picture of the infant Son of God tolerating a stable’s dirt and foul odors is a fitting metaphor for the later scene of the Savior bearing the stench of sin as He died at Calvary. What an amazing picture!