The unfinished basement in our townhouse has walls framed, but I am wondering about the insulation. Along the front (below ground) and side (partially below ground) exterior wall (ours is an end unit), it is a blanket of insulation with a silver back to the room. It looks like a quilt against the exterior walls, fastened by 'dimples'. Whoever framed the walls in the basement (just studs, no wiring, etc.) just framed them directly in front of the blanket. Along the rear exterior wall, opening via sliders to the back yard (under the deck), there is what looks like regular fiberglass insulation, paper back to the room, that looks like it might have been put directly against the concrete wall. The townhouse was built in '89, so that insulation looks a little ratty.
To give you an idea of the size of the walls, interior space in the basement is around 20' x 40'.
If you were going to finish the basement, what would you do? What needs to be done? What is essential and what is a good idea?