We have a 100 year old house that has an encapsulated attic that covers not only the house but over the front porch as well. There is no insulation in the attic at all. Since we are preparing to insulate my question is should I build and insulate a knee wall between the house and the porch or just insulate the attic over the porch.
If I understand the extent of the attic you describe, there is no need for a vertical termination knee wall - you can simply end the insulation where the exterior wall meets the bottom of the attic space. The insulation envelope you are creating just needs to match the footprint of the finished interior ceilings below.
You only need to insulate the area over the "heated" spaces. If the "porch" is heated, then you'll need to insulate it too, if not, then don't.
There is no need to build a wall between the "house" area and the "porch" area. In fact, it might be best not to build a wall so the attic ventilation remains the same and continues working in the same manner. Building a wall could block air flow.
When you add insulation, you'll need to consider: 1) How much? 2) what kind? 3) with or without a vapor barrier? 4) adequate attic ventilation? But those are maybe separate questions for Stack Exchange.
By the way, around here, commercial insulation contractors can buy and install the insulation cheaper than us home do-it-yourselfers. I'd check with them before I tried to do it and get those little fibers up my nose.