The thickness depends on what is underneath. If you are laminating it to a full plywood deck, then 1" is fine if you don't need features deeper than about 7 scale feet (if you do there are other ways to achieve this than thicker foam, but I digress).
If you are putting the foam over "open grid" benchwork, then I would recommend 2" foam instead. It is strong enough to support itself and a good deal of scenery weight, provided your grid is no more than 24" on centre.
A glue that many of the local modular guys (
www.hotrak.ca) are now using is the polyurethane type (Gorilla glue is one brand). It cures whne exposed to moisture, rather than air, so will "dry" right to the inside of the joint. The problem with white or yellow glue is that it dries around the edge, effectively sealing still wet glue inside. It may dry
eventually, but that's a long time to wait...!
As for cutting it, long, thin knives seem to be the tool of choice for shaping. Deboning knives can be honed to razor sharpness fairly easily. Cutting the slab of foam to fit your benchwork can be done on the table saw, but take care not to melt it by either forcing it or going too slow...
Andrew