This theory belongs to Thomas Gold:
http://astro.cornell.edu/people/facs...hp?pers_id=102
http://people.cornell.edu/pages/tg21/
This guy is apparently a genius.* He single handedly built Cornell University's astronomy department and was first to come up with theories pertaining to subsurface oceans on europa and the dried up riverbeds on mars.
Since carbon and hydrogen are light materials, they are among the most abundant materials in the universe. It makes sense that methane (pretty much the simplest combination of carbon and hydrogen) would exist plentifully in our solar system. And seeing as how methane is the lightest hydrocarbon, you should actually see more more methane as you move further away from the sun, so that the outer planets/asteroids should have plenty of the stuff.
As far as nuclear waste goes, we should do what everyone else does, reprocess it. This gives us more fuel (which admititly can be used for weapons) and reduces the waste volume by (i believe) several hundred times. The waste can then be basically turned into glass. As a ceramic, it's pretty much impossible for the waste to find it's way into the water supply (cermics don't solvate).
Personally, my thought is that once the waste is in this stable and greatly reduced form, it can potentially make sense to just shoot it into the sun. Although there really is a shitload of waste already, and it will probably be too much to launch economically (even in reprocessed form) given current launching technologies.
*As with most really smart people, he's also somewhat eccentric. He apparently doesn't believe in radiation pressure. That is, he doesn't think that solar sails work, or that radiation can impart momentum on objects.