I do a combination of both. Before even cutting pieces, I figure out which edges need to be straight cut, and which need to be beveled (and in which direction, in or out). It doesn't change the size of your pieces, if you do it right. So you trace the piece out. Then lightly score the line to have a cutting base. From there, you angle your blade either in or out. and slowly slice the angle away. It may take a couple times. Having a sharp blade is key. I'd recommend buying a 100-pack of scalpel blades. After I cut the foam, I will then pull out the dremel and smooth the bevel and/or change the angle if needed. I've found that with a grinding bit on the dremel, it wants to bite too hard on straight cuts, and you end up with a lumpy and bumpy line. If you cut first, you then have a straight top line (aka the visible portion), and can sand the lower portion to increase the angle if needed.
So planning is really key. I print and cut out my paper templates, then work in sections and tape them together to verify the fitment. In some cases I'll modify things here or there, especially if you need certain pieces to fit a bit better.
ANd if you have a belt sander, use that. 10x easier having a solid sanding base, and moving the piece as needed, than trying to hold both a dremel and piece steady to get a straight line. I'll probably be grabbing a cheap one soon, just for ease of use and convenience.