In the past, I usually Thoroseal the foundation walls. It makes a
nice finish and seals it good. Then I frame with 2X4's using wood
studs and metal tracks on the top and bottom, makes it easy to put in
the studs.Then I use regular R-13 batts w/ paper vapor barrier. I use
the mold/mildew resistant sheetrock (green or purple in color) just
for an added protection.