We talked about this on Facebook, but for the sake of public education...
The tool I use to cut most foam pumpkins is the Walnut Hollow Creative Versa Tool (available in craft stores and on Amazon). It's technically a wood burning tool, but it has interchangeable tips. I'm using the tip that's like an X-Acto blade.
But I've modified the blade to make it more narrow and pointy. I did this by using a sanding/grinding drum attachment on a Dremel, to grind the blade to a thin point. Then I sharpened it with a knife sharpener.
The pointy blade allows for easier cutting of small details like eyes and teeth. I know everyone can't easily modify their tools like this, so I'm playing with the idea of mass producing such a product someday.
Would anyone be interested in a Zombie Pumpkins brand heat knife, for use with foam pumpkins?