Basements, Attics and Crawl Spaces - Basement Insulation and Moisture; Help!

Alright, I just began finishing my basement. I have all of the framing and electical complete. Since my basement seems to be dry and the home is only seven years old (concrete block foundation) I planned on filling the wall cavities with R-13 batt insulation and using a vapor barrior between the sheetrock and the insulation. After doing I little more research, I'm not so sure this is the best solution. I do not want do deal with mold!

additional info...
-there is rigid fiberglass insulation (Owens Corning Warm & Dry) on the exterior of the basement wall.
-there is no sign of water spots on the walls.
-there is approximately a .5"-1" gap between the basement walls and the studs.
-I am not drywalling the ceiling, I am leaving it as is and painting it flat black (industrial look). Therefore there will be an opening at the top of the wall allowing the wall to breathe.

Help! How do I insulate my basement???

It would have been nice to put drylok on the cinder blocks before you framed the walls. I have done alot of basements in ma. and I usally use r-13 with a vapor barrier. When you say your going to fill the wall cavitys you mean in between the studs right. It is a good thing that you have 1 to 5 inches of space between the back of the stud and the cinder block this will allow for air flow to circulate through. When I insulate like I said the r-13 with the vapor barrier (kraft faced) I staple it on the outside of the studs (were you are going to screw the drywall to) not on the inside of the stud bay. You won"t have to put a vapor barrier between the ins. and the dry wall because it is already on the insulation. Also you might consider using blue board instead of drywall it is a little better with any moisture. I have all my work inspected and I have not had any problems, I have also been back to quite a few jobs over time and no mold problems. You could also run a dehumidifier to. I hope this helps.

Pat

Where to place a vapor barrier or even if one if necessary is a topic you should review. Using drylock can also cause issues. The theory, no credit to me, is that the wall needs to be able to dry in one direction or the other and below grade it can't dry to the outside very well. Here are some links to read:
BSD-103: Understanding Basements — (http://www.buildingscience.com/documents/digests/bsd-103-understanding-basements/?full_view=1)
RR-0509c: Renovating Existing Basements — (http://www.buildingscience.com/documents/reports/rr-0509c-renovating-existing-basements/view?searchterm=basement)

Bud