I have used the sheets of snow. I cut the sheet to size to fit over buildings and such. I put the sheet snow on all flat surfaces including roads. The I get a bag of loose snow and sprinkle wherever i want it to look like the snow was shoveled or plowed. On roads it really makes a great effect when sprinkled on the road edges. Makes it really looked plowed.
I use a quilted bed sheet, then add snow flakes and or fluffy sheets of snow at various locations. The quilted bed sheet provides a clean surface without fear of something getting caught up in the wheels etc.
Craft stores sell quilt batting which can be used to make snow mats. The material is inexpensive and easy to cut, but it should be kept a safe distance away from moving parts a piece of it will almost certainly end up wrapped around an axle or jammed between gears. Tracks with molded roadbeds (Fastrack/Realtrax) work best, as the roadbed will keep the material tamped down and safely away from the wheels.
I am using a table cover that you would normally put under a table cloth. The one side is vinyl which adds some weight on the wood floor under the tree without sliding around. I ordered the 5x7 1/2 and am easily cutting to my 4x7 size without any shedding. The other side is white felt (snow) and again, no shedding! As others have suggested, I am adding some village loose snow in certain areas. I do not want anything that will shed or be fluffy near the track. I really like the look of John's sherpa fleece and might have to pick some up for certain areas.
I want to add some items to the good ideas above. If you want to create a snow scene on the entire layout, I agree that white felt padding works well, especially for flat areas. I also used 2 products to shake over felt strips: Woodland Scenics Snow Flake Snow and FloraCraft Diamond Dust (from Hobbytown). The latter gives a slight glisten.
I also created a sledding hill using Shaper Sheets from Woodland Scenics, covered it with a plaster like product, then shook some Snow Flake snow over them. Photos below.
FWIW...On the latest episode of Shark Tank was an artificial snow product. It is a chemical powder when mixed with water produces snow-like particles. One of the sharks liked the product so much that a deal was made with the company owner. I have no idea if the product would be relevant to model train layouts.
If you're looking to add snowflakes like to the tops of buildings, Woodland Scenics snow works well. I found a product at the local art/craft store that are tiny bits of sparkly stuff in different colors and clear. The white is good for new/shiny snow, and the clear can be added over existing snow to make it sparklier.
BTW I'd be careful using baking soda. It looks great and works well for like a one-time photo shoot, but it's basically salt and long-term could rust track and other metals.
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