I like the hide a key idea,might be able to inset a key box in the post.
As far as material goes, it all depends where you live and how much moiture and insects are in the soil. Cedar is good,better if treated below grade.I have heard that Cypress has very good weather resistance.
Pouring concrete dry bag mix around the post in the hole works too and let the moisture in the ground migrate into the mix and set it up over time, I have seen that done too.
Lap joints as previously mentioned are a very good way to go, like is shown in your picture.