Foam pads are much more gentle than wool pads, so they should be used when you are in the final stages of polishing your plane. Although these pads won't be able to remove deep scratches or dirt, they will be able to get rid of small scratches that are right on the surface. Foam pads can also remove any streaks or marks that are left on the surface of your plane from the earlier stages of polishing.
There are only two types of foam pads: open-cell and closed-cell. Open-cell pads have small holes throughout the surface, so they appear to be very similar to a sponge. If you are using a foam pad during the final part of your polish job, it's best to choose a closed-cell pad since it is an even surface that allows you to get a streak-free shine.