The installation of acoustic foam helps to improve a rooms acoustics. When sound waves hit a hard surface they can bounce back into a room and interfere with any new sound waves that are being projected from a speaker.
Acoustic foam will absorb these old sound waves as soon as they hit the surface and prevent them from bouncing back into the room and clouding the current speaker projection.
A fabric wall finish can allow for all of the speakers, foam and cabling to be neatly hidden away behind the fabric so not only do you have a room that can perform on a technical level it can also look aesthetically very impressive.