I have used the Woodland Scenics foam. It is more flexible than cork, sound characteristics are about the same after you ballast. Putting down cork or foam is not hard at all--once you've figured out where you want the track to go, you draw in the lines, lay down some glue (Aleene's Tacky Glue or latex caulk) and set the foam down on the glue. You don't have to soak the WS foam.
Dust is a problem in that one's layout gets dusty, which doesn't look nice, but it's not really a huge problem unless you have a dirt-floor basement or huge water problems. My layout gets dusty, I blow the dust off with my air compressor or a can of compressed air once in a while. It's not a huge hassle. In the long term, you might consider finishing your basement rather than putting plastic over the layout: more work up front, but you end up with a nicer basement in a more comfortable environment.