It looks like you have a new cane growing which is good
Is there a hole in the bottom of the inner pot? If not then it could make it difficult getting the watering balance right and I would definately re-pot in to a pot which does have holes in if that is the case.
I would probably be inclined to repot anyway if that was mine. The choice of medium is one of personal preference in many cases.
There are many choices but you want something which lets enough air to the roots. Choices include, Sphagnum Moss, Bark Chips & Cocunut Husk Chips and these can be mixed with each other and mixed in with things like charcoal, sponge rock, foam, to name just a few.
Put as simply as I can... if you tend to overwater and/or are in a humid enviroment then you want to go towards mediums that dry out more quickly like bark... if on the other hand you tend to underwater and/or are in a very dry enviroment then you want somthing which retains water more, like Sphagnum Moss.
It can also depend on the orchid of course, some like it wetter than others and so this affect the choice.
I know that somewhere there is a link to a page about choosing a medium but I can't find it just now.
I hope I've not just confused things with all the choices
Personally I favour a mix with a high proportion of bark, but it's not the best choice for everyone.