Theres a guy on the Lateral-g forum thats doing inlay style trunk panels for his camaro. I think hes doing them out of MDF. Theres really no wrong or right way to do it. Just depends on what type of ideas you have and what look your going for.
I like layering thinner pieces of wood to create designs instead of using straight foam, it will give you harder edges compared to making designs out of only foam.