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Going to be building some walls, though if ii have to ill skip sandpaper and just dap them up.

I generally dont use any sand paper but i suppose it all depends on what type of look your chasing

I usually use 100 - 220 grit for rough sanding and shaping and 400 grit to finish if I need a smooth finish.
Here is some examples for Pink Board that I used the sandpaper to shape
https://picasaweb.google.com/101723370126943265720/Warhammer40kTerrain#

That's some impressive foam work, DXM. Personally, I do most of my forming by knife, going no coarser than 220 grit for forming - it cuts quickly enough that I prefer to avoid gouging the foam with anything rougher (in all honesty, though, it likely has as much to do with the relative sizes of my stockpiles as anything...).

Anything that I want really smooth, though, gets a thin layer of spackle (followed by a slightly finer sanding), topped off with a wash of thinned PVA - the watery glue soaks into the filler enough to keep it from beading up, leaving me with an almost plastic finish that can take a fine sanding.