For small parts where finish isn't critical a bread knife is pretty
good.

A hot-knife cutter is the easiest way to cut these foams, and gives a
good smooth finish. A typical hot knife is a length of wire stretched in
an insulating frame with a constant current passed through it. The hot
wire melts it's way through the foam.

There are some health issues with polystyrene: It gives off styrene
monomer which is listed as a weak animal carcinogen.

MSDS exposure levels are as follows:STYRENE
PEL (OSHA)     : 100 ppm, 8 Hr. TWA 200 ppm, Ceiling 600 ppm - 5 Min.
Max.
TLV(ACGIH)    : 50 ppm, 213 mg/m3, 8 Hr. TWA, Skin STEL 100 ppm, 426
mg/m3

Most foams probably give off fumes when heated, so always make sure you
have good ventilation.

Another good way is to use a electric carving knife. The same kind you
use on a turkey at Thanksgiving. This works best on foam rubber.

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