Lumber and Siding - Patching Outside Wall

The outside wall(lower portion) of my house is losing quite a few patches and I could see the white thermocol. I am not quite sure if my description of the problem is correct, so i am attaching the link to the images of that wall.

Picasa Web Albums - Raja - Outside Wall ... (http://picasaweb.google.com/rgudepu/OutsideWallPlaster#)

How can I resolve this? What kind of plaster should I use? Also, this area gets a lot of water from my sprinkler system. Does this cause any problems?


Thanks.
rgudepu.

You can buy stucco repair in a can at the big box stores. Once it has dried, paint with matching paint. Then tie a string around your finger to remember to keep your trimmer away from the wall. It looks like trimmer damage.

aahhh...Yes, I think it was a damage caused by my trimmer. Thanks a lot for the advice Chandler.