This year, I'm making a bunch of 2" thick tombstones. In the past, with my thicker 3 1/2" or 4" thick stones, I used Terra's method of routing out grooves in the foam before gluing the pieces together. With 2" foam, though, that's not an option. I'm also not good at free-handing pretty much anything, and I knew if I tried to drill holes for PVC by eye, I'd screw it up. So I bought an Irwin 7/8" x 16" spade bit, and built a jig.
It's pretty simple. There's a piece of 1/4" plywood as the base, and 4 pieces of 3/4" plywood, all glued together. The sizes aren't important--I just used some scraps I had laying around. You just want the base to be big enough that you can lay the foam on it and keep it flat. The holes were drilled on a drill press. I just taped the two long pieces of 3/4" ply together and drilled through both at once. This is important, as it keeps the holes aligned when the jig is assembled. With aligned holes some distance apart, they will act as guides for the drill bit.
The horizontal spacing of the holes is also not really important. The vertical height, as you can imagine, is very important. The first hole on the left is 3/4" above the bottom of the plywood. This would insure that the hole would be exactly in the middle of a 1 1/2" piece of foam as it lays on the base. The next hole is drilled at 1" (for 2" foam), and in 1/4" increments up to 2" (for 4" laminated). In the picture below, I have the bit through the second (1") hole, and you can see it is perfectly centered on the 2" foam.
Now just put the bit in your drill and go to town. It helps to clamp the jig to a work surface so it doesn't slide around as you're pushing in the drill. In the final picture, you can also see that I am using another block as a spacer. Again, the measurements aren't that important--it's just to keep the foam square to the fence when you're starting the hole. You can leave it there for the entire cut, or remove it after drilling the first inch or so (just far enough for the spade bit head to get all the way in the foam). You can get about 12" into the foam with this jig.
This jig didn't take long to throw together, but it's a great way to make sure that the holes are perfectly straight and centered in the foam.
I built my own drilling jig. I made settings for 2", 3", and 4" foam. If I need to drill any 1 1/2" sheets, I can just lay down a piece of 1/4" plywood and use the 2" setting.
Instead of a jig, I heated a piece of rebar and used a piece of wood to keep it at height as it went into the foam. Worked great. For a larger hole, I'd use metal conduit.
I did a simpler version of this jig by drilling a pair of holes in a piece of 2 x 6, and then clamping it in a Workmate. Draw parallel lines on the 2x6 at 1/4" intervals and you can line it up for height in the jaws of the clamp.
Then you take the 2x6 out to the yard and use it to align the rebar when you pound it into the lawn for each tombstone.