I've used these make-up sponges. 
http://www.amazon.com/FantaSea-Foam-Wedges-100-count-Bag/dp/B0035LCSCO/ref=sr_1_2?ie=UTF8&s=miscellaneous&qid=1276792811&sr=8-2

Very cheap at Wal-Mart or discount stores.

Depending on the puppet and the effect you want all of the above are great.....for real looking teeth I use the makeup pads mention by angel above they can be easily carved and they have the nice white colour.

Daryl H

I found some EVA foam at Hobby Lobby today on sale so I picked it up to see if it will work.

I may try other methods down the line, but that's an easy method for me to experiment with on this one puppet to see if it looks good / works well / etc.

Thanks for all the suggestions!  I'll post a picture when I'm done (which should be in the next week or two depending on how much time I have to work on him this week).

By the way, I'd recommend using a very sharp X-acto knife or box cutter to cut those EVA foam sheets that Hobby Lobby sells. Scissors tend to make little fringe-like bits on the edges.

What about actually using dental acrylic? I have used it a lot for puppet mouths (as well as for eyes) If you don't want it to be as hard a material (and to avoid teeth clacking noises) - you could use flexacryl.. Which is a flexible version of dental acrylic..
Just be sure, if you are going to use dental acrylic, to wear a respirator as it is pretty strong smelling.

Depending on the puppet and the effect you want all of the above are great.....for real looking teeth I use the makeup pads mention by angel above they can be easily carved and they have the nice white colour.

Daryl H

The only problem I find with them is that they tend to turn yellow very quickly.  Not the best choice if you want nice white teeth.  But like others have said, craft foam, sculpty, even plastic containers cut up can work.

- Kanja

i agree with Chensational, exposed foam will turn yellow very quickly

However makeup sponges are a very different make and I have had no issues with painting them or using them as they are for teeth.....js.   I love the realistic look you can get from them they are light.  I am currently using them on a zombie puppet I am making for Halloween.

Daryl H