Hi Flingwing,
Yes, the layers are stacked on top of each other. The foam is about 3cm thick and I glued it to some thin 3mm plywood to stiffen it up and I added some loops on them to help with getting them out of the tool box.
I don't know exactly what type of foam it is, it was just something that we had a lot of in a previous work place, but it was really easy to cut. It took me about 2 hours to do my entire tool box by hand, simply tracing around the tools with a pen and then cutting it with a stanley knife. The foam is white, so I painted the bottom of the cutouts with some red paint (actually permanent marker), so it's really easy to do a tool check.
I made one layer with all of my most used items, like torch, snips and ratchet screwdriver and then every other layer was by type of tool, so I have a layer for spanners, a layer for sockets, a layer mostly for pliers and misc layer with all the rest.
Cheers,
LG