I've had pretty good results by using epoxy mixed with sand, and just coating foam with that.
I'm not terribly artistic either, so I try to rely on randomness or natural patterns as opposed to making a design myself.
One method that worked fairly well (but was a bit messy) was to break sheets of stryofoam, stack them like rock layers, and then do an epoxy/sand coating.
You might want to take a look over at dendroboards. I haven't checked in over there recently, but it seems like there are almost always a couple people building vivs and backdrops and such out of foam, great stuff, silicone, epoxy, drylock, etc.
I'm not sure about sticking the rocks in, if you do it quickly they will probably stick, but if you wait too long, the foam might develop a 'skin' and not adhere as well. If the rocks are rough/porous that will probably help, as will putting them on the foam somewhat damp (the polyurethane foams (great stuff, gorilla glue, etc.) use water to foam and cure).