BioBags may be the ticket. Made from a corn derived material called "Mater-bi," BioBags promise to be 100% biodegradable and compostable. They also claim to reduce trash oders as the bags are "breathable" and so release heat and moisture instead of letting them build up.
With bag sizes ranging from 33-gallon yard waste down to .91-mil dog waste bags, BioBags has a product available for practically every use.
Available at several online retailers as well as locally at Cole Hardware, BioBags are slightly pricier than your standard trash bags, but aren't unreasonable, especially when considering their (lack of) environmental impact.
Check out the BioBag website for more information.