Foam is great, and not too restrictive at all,... until it gets dirty... Which is a good thing, ... you want it to pick up the dirt and dust instead of letting it into your engine...
If you're in a dusty place,.. keeping the stock air box and using a foam filter in there is better than a cone.
There is a DIY foam filter for the stock box in the tech section...

I would use "filter foam" because it's designed for the purpose... You can buy it at bike shops and it's not expensive.
You must oil foam filters or they do nothing.  Not dripping, just lightly and evenly coated.  They sell special filter oil, but I find it to be sticky and messy...  Regular old 30wt or any other wt oil will work fine.
I would design the filter to be removable, so that you could squeeze the oil into the foam for even distribution...  if you can't do it this way, you'll have to buy filter oil because that can be sprayed on and don't need squeezed.  Not as good, because it only coats the surface, but okay...
Clean with soapy water, rinse , dry , and re-oil...
K/N fabric filters must be oiled too... same process, just more delicate (no squeezing)...
I've used both in my bike,... and see no performance difference.  
Foam will do more filtering... but, it's easy to over oil it.  K/N's just won't take that much oil, but I suspect aren't as good at filtering either...
All filters will perform better in an airbox rather than in the open, and they will stay cleaner.  Going to an external is a cosmetic, or space/weight saving mod only.