RFS,
This is a popular method of mounting track and making scenery in North America. If you get Model Railroader in the UK, most of the project railroads they build use some form of this construction. The foam is used as a base. You can cut a roadbed profile into the foam using an electric cutter which is pulled through the foam. You mount cork roadbed on the foam and the track on the cork.
Since I am building a yard which is basically flat with no elevated right of way, I glued the track directly on the foam. I use a method by David Barrows an American modeller, were all the table surfaces are flat 2 foot x 4 foot "dominos" bolted together and made of 3/4 inch plywood. So I have four dominos bolted together for a 16 foot long yard.
This may not be applicable method of construction in the UK as most North American layouts don't leave home. Since, many UK layouts do, I thought using foam may be a good way to lighten the weight of the layout.
Pardon "railroad" instead of "railway" and the use of Imperial measures for metric. Old habits die hard.
Ian