There are three common methods for insulating the interior of a basement incorporating a frame wall. Each method should be assessed on basic principles of practicality: the ability to do the work yourself, the cost of materials and labour if contracted out, and the expected outcome (e.g. will it be a finished basement or just storage space?).
The three current approaches are
Preparation
After checking the wall and making any necessary repairs, air seal all leakage paths such as at the sill and around penetrations. This important step provides the primary air barrier system.
For information about materials and techniques, see Chapter "Materials," and Chapter "Comprehensive air leakage control."
Use dry lumber for the framing. If the lumber is not dry, allow the framing to dry for at least two weeks before adding insulation and covering the wall with the air and vapour barrier. Temporary bracing may be tacked on to the framing to keep the wet studs from twisting as they dry.