Hey Mike g: My daughter and I painted the clouds using the "cloud stencils" made my New London Industries... Saw them at a demo at a local train show year's ago.... I am pretty sure they are still available on line for about $15.00. I used blue masking tape and attached my stencils to a 4 foot stick so I could hold them up and control them.
If you're going to paint them with the layout in place.. you'll need to get some thin plastic sheeting to cover the layout as the overspray is hard to control, and a carbon filter mask is advisable as most of the spray can white paints are solvent based.
The results are great and pretty easy to achieve, and it goes pretty fast.... I'd probably recommend you get a 2 x 4 foot piece of cheap scrap plywood or masonite, paint it the same blue as your room and spray some test clouds to get the hang of it first...
