Magic foam was a creation of the Shaman Logray used to extinguish fires.
The foam is delivered by being thrown or dropped on to a target in small bags; the bag burst upon impact, producing a large splash of material over a wide area that is usually sufficient to supress any flames in the target zone.
The Ewoks used this foam on their trees when Morag the Tulgah witch attempted to burn them down with cursed Wisties. In the process, cursed Wisties doused in the splash were changed back to normal in the process, which allowed the Ewoks to address the ignition source of the forest fire. Guided by the cured Wisties around the dangerous convection currents caused by the forest fight, Wicket and Kneesaa flew hang gliders above the trees to airdrop bags of foam, getting the fire under control and saving the Soul Trees.