It goes on the
heated side of the assembly; inside for heated climate, outside for cooled climate;
"An ideal approach to control indoor humidity and indoor air quality in the hot, humid south is to minimize the need for outside air. The air should be obtained in a controlled manner (mechanically with a fan). The air should be conditioned where it comes into the building. It should be dehumidified by cooling it below its dew point, and used to maintain the enclosure at a slight positive air pressure relative to the exterior. By doing so, it can be used to control the infiltration of exterior hot, humid air. Furthermore, the building envelope should be built in a
manner that aides in the pressurization of the building. Tight construction is recommended. The building envelope should also exclude rain, control rain water absorption and control vapor diffusion. Vapor diffusion retarders should be installed on the
exterior of building envelopes in the humid south as compared to the practices in northern heating climates. Finally, the building envelope should be forgiving so that if it gets wet, it can dry to the interior. Interior vapor diffusion retarders such as impermeable wall covering should be avoided." From;
http://www.buildingscience.com/documents/reports/rr-9302-humidity-control-in-the-humid-south
"Hot Climates
In hot climates and during cooling periods the opposite is true. Building assemblies need to be protected from getting wet from the exterior, and allowed to dry towards the interior. Accordingly, air flow retarders and vapor diffusion retarders are installed on the exterior of building assemblies, and building assemblies are allowed to dry towards the interior by using permeable interior wall finishes, installing cavity insulations without vapor diffusion retarders (unfaced fiberglass batts) and avoiding interior wall coverings such as vinyl wallpaper." From;
http://apps1.eere.energy.gov/buildings/publications/pdfs/building_america/35793.pdf
Gary