Hi.
The foam should be the black type, not the blue stuff.
Yes it has to be insulated from wires and circuit boards.
I used thin cardboard, and plastic baggies.
Baggies for smaller bits. for full across the chassis, card (thin non corrugated cardboard) is great.
IF you can slid it under the circuit board, AND fit the shield then that is good too.
Though do NOT use plastic under the circuit board as an insulator, as the sharp solder points may pierce it. use a thin hard card type paper shield. (It may be too difficult to get the stuff under the circuit board, if it is hard to do, skip it. the main areas are the chips and around the chips)
The foam also MUST be grounded to the case.
Each separate baggie or layer of foam needs a ground wire to the chassis. Thin wire is perfectly OK for the ground wire. ((Basically if you do NOT ground them, the foam bits saturate, and reradiate the RFI anyway))
You want to cover the main chips most of all. if they lay flatter than the rest of the stuff, add a small layer just for the chip.
I fill the whole DAC chassis with foam.
One point is the item needs to run cool naturally, anyway. If it runs pretty hot.. this tweak is not such a good idea.
I bought 3 large 'industrial' sheets of antistatic foam, but for a start the 6" sheets sold by Radio Shack work great. I started using those, and only later went for the big sheets. Any thickness 1/8" is good as it fitss under the circuit board better, but any antistatic black foam up to 1/4" is fine.
It is pretty hard to do any sort of CD changer with the foam. So that is not a good item to do.
(I have tried)
A separate DAC is great to fill up.
For a Preamp it may be too much. I actually took the stuff back out of one of my preamps as it did not improve the sound. it only made it seem dull.