Hopefully Gil Beringer will add some of his tricks here. Since I've probably got as much experience with this as anyone, here are a few comments.
Foam covered with paper/fabric/glass/carbon fiber can be a quick, easy way to build nice-looking compound fuselages. Like any plane, the more time you spend building and finishing the better the result. If it is done really quickly(possible with foam, not possible with balsa) it won't look so hot.
Paper-covered foam can make a very solid, nice-looking finish. It will NOT be ultra light. The best you can do with a hollow foam core and using all the tricks will be close to the same shape built with a balsa/carbon veil shell. Using solid foam with brown paper covering will give a heavy part- at least 50% heavier than a finished balsa part.
Foam/paper is more subject to hangar rash than a wood surface. Silkspan over foam is no sturdier than silkspan over open bays. Any little bump will put a hole or dent in it.
Designing a foam part take quite a bit of planning, esp. for a fuselage. It is probably easier to use Ron Burn's foam buck method and mold the fuse from balsa. Locate the cutting bulkheads carefully minimize the number of separate foam pieces to cut and make alignment easier. The foam should end up 3/8-1/2 in. thick, after the final outer shape has been sanded. Fill the surface with lightweight filler and sand again.
Design in some balsa or hardwood stringers to carry the loads. The foam won't do it. Extra structure around the nose is needed to carry the engine and landing gear.
When sanding use sharp clean sandpaper. 150-180 grit works well, even 80 grit if there is a lot of material to take off. Don't let too much dust build up or it will drag grooves into the soft foam. Take particular care to sand the wood down to the foam using light pressure. Heavy pressure will bend the foam and make undercuts that are difficult to level off later.
Once the foam is shaped and filled I'd recommend covering it with lightweight plastic film for strength and ding resistance(Ultra cote or SLC from the Core House). Buff the film and then cover with light tissue or silkspan applied with water-based polyurethane varnish. Make sure the silkspan goes on smooth with no wrinkles. Wrinkles will take a great deal of work to sand out and patch to get a smooth finish. While the paper is wet you can poke at the covering with the ends of the brush bristles to work out wrinkles and make them lay down.
After the silkspan is on and sanded the part should be ready to primer and paint.
Phil C