Styrofoam can be cut and shaped into lots and lots of shapes. you can carve it with sharp razor blades, electric carving knives, hot wire cutters, saws of various types and you can also use your fingers.
Home Depot sells Styrofoam building insulation is 2x8 sheets. I try to always have a couple of sheets around. They are just that handy. We use them for building models, adding spacers to the counterweight system and more.
a relatively popular use of Styrofoam is to carve out intricate patterns and then apply the sheets of Styrofoam to walls and other flats. There are many methods of carving out Styrofoam, the simplest being with a utility knife. Extreme caution must be taken when using sharp tools, etc. Another handy tool is a standard kitchen electric knife; though these are more popularly used for carving regular foam rubber versus Styrofoam.
Custom cutting tools are also available for cutting Styrofoam. As you can see by the pattern of the cutting wire, this is being used to cut out crown molding. http://www.hotwiredirect.com/products/hot-knife/
Using hotwire cutting tools are extremely efficient when cutting Styrofoam, but bring additional safety precautions to the table. First, they are very hot! Second, but more importantly, they must be used in well ventilated areas and may require wearing safety masks with specialized air filters. You'll need to refer to the material data safety sheets as needed.