I've been working on my own layout lately. There are a couple of areas on which I plan on filling in with grass. In the past, you would acheive this by applying ground up foam in various colors to the layout surface with watered down white glue. It looked OK, but wasn't convincingly realistic.
Now there is a different way to get a much more prototypical look using a product called static grass. If you haven't heard of it before, static grass is a finely cut synthetic fiber that will stand up on end when statically charged. It is applied to the surface by shaking it out of a device that will apply a low voltage electrical charge to the fibers, thus causing them to stand up on end like real grass. It's the one time when I actually welcome static electricity!
In researching static grass application methods, I came across a video by Luke's APS where he applies some static grass that looks amazing. Even though the example is for a gaming scene, the techniques used are applicable to model railroading.
Check it out: https://www.youtube.com/watch?v=8FWCD_MMD_M
I hope that you get a "charge" out of it like i did!