I use the pink and blue foam. You can easily build up layers by glueing bits on to your base piece using a hot glue gun. I then take a rasp / bastard file - I've got several different ones, half round, 'rat tail' - thin round, etc, to shape the contours and undulations.
You can get different effects in the finish of the foam from either leaving the surface alone after rasping, or using different grades of sandpaper to smooth it over. You can also try picking bits out of the foam using a knife blade or similar, to a give clean finished, ripped out area, which can work well for replicating exposed rock faces. I find the stuff pretty forgiving.
To prime it, I give it an all over coat of black, dark grey or dark brown (depending on the terrain), watered down acryllic and paint from dark to light.
Simon