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Default Recessed Lighting Questions

Hello,

I have recessed lighting in my kitchen (I imagine the cans are the
cheapest quality as they came with the builder) and am working on
finishing out my basement with recessed lights.

I'm looking at energy efficiency/brightness tradeoffs. I'm really
interested in the LED bulbs, but it seems as though the heat transfer
requires the fixtures to be 'open air' fixtures - does that eliminate
recessed lighting as an option if I want to go with LED bulbs?

Also, in terms of replacing the incandescent bulbs in the kitchen - can
I just drop in a CF or a halogen bulb, or do they have to be rated for
recessed lighting?

Thanks in advance, and I apologize for my ignorance~

Lisa