I read somewhere that using a fine-grit yellow sandpaper would make a nice N-scale gravel road, but what would be a good way to stick it down to XPS foamboard?
Use wet-or-dry sandpaper and any suitable water-based glue. Wetting the sandpaper may make it conform to the surface better, as with thin wood veneer in marquetry. You can do the same trick of sanding the backing as is done with signs applied to buildings.
Form any desired camber into the road in the foam; you may want to provide a slot at the edges and roll the paper in so there is no visible edge, then plaster or landscape to an irregular ‘feather edge’.