My basement is CMU blocks and concrete floor.
I had water issues, so I waterproofed it with an interior french drain, drainboard at the edge and a sump pump. This wouldn't take care of dampness so I added a dehumidifier.
I plan to finish the basement and here's my understanding of how I should go about it:
I think I'll avoid vapor barrier so I don't get mold problems. It gets quite humid around here. I'm in Washington DC on the east coast and if I interpret correctly the following: http://www.house-energy.com/Basements/Interior.htm, I shouldn't use vapor barrier. I have a few minor cracks in the wall maybe I should fill those may be not.
Rigid extruded polystyrene installed directly on the wall. Two inch R10 perhaps tucked into the drainboard of the french drain. This way any moisture will go down into the drain.
Leave some space (inch or two) then build the wall from the ground so it's completely detached from the wall.
Not sure what I'd do with the floor; maybe would insulate it maybe not. Height is only 7ft so any inch of height is precious.
Here's an article about this in BuildingScience.com: http://www.buildingscience.com/documents/reports/rr-0309-renovating-your-basment
This is all theoretical, I've never done anything like this, so I'm looking for feedback. Also, would I need insulation on the ceiling? I like the idea of spraying fire-rated foam, is it an overkill? Guess, I'd need soundproofing if nothing else.
Edit:
Since I'm starting with the walls, here are my first-priority questions:
Fill cracks or not?
Vapor barrier or not?
2 inch rigid foam or just 1 inch and then more insulation next to the dry wall? (I'm thinking all insulation better be away from the dry wall to avoid any condense around it)
Do I tuck it into the drainboard?
Do I glue the insulation or is there another method of attaching?
Use spray foam to insulate the parts of the wall between the studs? Or is the rigid foam going to be fine? (I'm thinking the spray would fill all gaps, therefore'd be better)