I've heard of people using a clay extruder for grass, hair, ropes..etc etc
A neat way to do it is to just cover the cake board with smooth green fondant and use something to texture it.
This cake by ChucKles has a great grass effect.
http://cakecentral.com/modules.php?name=gallery&file=displayimage&pid=1710492
I've also seen people just poke it full of holes with a pin or some kind of tip.
I just did a three tier wedding cake with fondant grass all around the sides some sticking above the tiers. I added Tylose to the fondant and cut each piece by hand using a pizza cutter.
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