Blankets will absorb high frequencies, foam will absorb mids and high frequencies, and acoustic panels would get you down into the bass realm. Using moderately narrow band absorption like a blanket doesn't help a ton as it simply acts like a low pass filter for decay times, which isn't extensively helpful but can curb SOME harmful reflections. Foam is more broad and therefore better - still acts like a low pass filter, but curbs more harmful reflections down to a lower frequency. If you only use foam, I would advise to ONLY use a product that has been tested - many people manufacture random "foam" and just call it "acoustic foam" or "soundproofing foam" when it really doesn't work as well. And others literally COPY the data from Auralex's tests so make sure you're looking at the real data report from the lab. I would advise the same with panels or bass traps. While foam will kill reflections, it still won't really give you the best recording possible, as the room can still make toms or the kick sound boomy or thin, but you'll likely get much crisper cymbals and a good punch from the snare with foam or thin (1-2") acoustic panels (similar with other instruments as well).
So in closing, yes it CAN be better than nothing in a small room, but won't help with the whole picture, only a small part of it.