I have a 1950 house, foundation is block. Beneath the sill plate is a overlapping tar paper. I want to insulate the basement, but I wasn't sure if I should seal the edge of the sill plate with caulk or Great Stuff, or if I should just stuff insulation battings along the edge. Any thoughts on this?
You didn't mention the make-up of the "block" foundation but most likely your blocks are hollow - thereby each block is open at the top of the foundation wall. Normally, batt insulation should work fine there - one piece up against the rim and another lying over the open block.
Here's a link that may help describe your situation.