Insulation, Radiant and Vapor Barriers - insulation with block walls or something else?

Im wanting to finish my downstairs of my house and im not sure if i need insulation or something else. I have a split level home so nothing is below ground. I have no leaks or moisture problem at all. The blocks down stairs have been sealed and painted on the inside however right now it isnt heated. Im wanting to finish the walls with 2x4 and Sheetrock over the blocks and add a drop ceiling and heat the area. It is 400 square foot section. The other side of the house is my 2 car garage. Here is links to pics so everyone can get the idea of what im talking about.

http://bengriffin.com/images/Lower_Level_Floorplan.jpg
http://bengriffin.com/images/raintree_1203.jpg

Im finishing the bonus room in Lower_Level_Floorplan.jpg. it is all block and covered with rock as you can see in the picture. some people i talk to say i dont need insulation with the block being there and some say you need insulation. Then some people say something about a vapor barrier?? any info on this would be great!!

yes insulate with foam board 1 1/2" or 2" use the tongue and grove polystyrene. its not just for heat to helps for the A.C. Liquid nail the boards and either lat the studs flat or reg studs with some sister 8 inc or so kickers up against the foam board to hole it there. You can not use reg fiberglass in any basement walls we used to in the old days I'm a builder for over 30 years

great thanks for the advice. so when i go to lowes what do i ask them for? just say i need 2" foam board? i googled it and everything seems to come in like 30" x 40" pieces? can you get like 16" x 8ft pieces??

Maybe i was looking at the wrong stuff. i found another site that showed long pieces. What do you think it will cost to insulate a 20' x 25' x 12' wall?? keep in mind one wall is already finished so i will just be insulating 3 walls. a 20' 25' and a 12' wall at 8ft tall

The polystrene that I bought to use in my crawlspace came in 4'x8' sheets, just like plywood or OSB. It's prescored, so it can easily be broken into thirds or halves and I didn't buy mine from a chain store, so it definitely cost a little more, but I paid about $25.50 for each 2" wide sheet.

wow thats pretty pricey!!

wow thats pretty pricey!!

When I said 2" wide, I meant 2" thick and yeah, it isn't cheap.

Though it looks like from the Home Depot website that I paid about $5 more than the chain stores for each 4'x8' sheet because there's not a box within a hundred miles and it was easier for my local building supply to deliver it to my house on their truck, rather than me making a couple of trips for this one component of what was actually a multi-item purchase.

But yeah, even one inch thick, blue or pink styrofoam is more expensive than 5/8" OSB.