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Dense-packed cellulose is the best insulation to use for walls. It is inexpensive and packs tight enough to prevent air movement through the wall. It not only makes the wall warmer in the winter but also makes the house less drafty. Holes are drilled every 16-inches to access the wall cavities. Most often this is done from the outside. The siding is removed, holes drilled, cellulose dense-packed into the walls, the holes are plugged, and the siding put back in place. If you are planning on painting inside, the holes can be drilled through the plaster or drywall and patched after the insulation is installed. This may be the only way to access the wall cavities if your home has stucco or other masonry on the exterior. Dense-packing cellulose requires special equipment that can generate the pressure needed to pack the wall cavity. The equipment you can rent at home centers should never be used for wall insulation. The insulation will be loose allowing air to move and moisture to condense inside the walls. Hire a professional!
Insulation does not stop drafts! Fiberglass insulation in particular acts like an air filter - the drafts move right through it. A physical barrier must be installed to stop drafts but the interesting thing is the barrier does not necessarily need to be where you feel the draft. Your home experiences what's called The Stack Effect. It's a natural phenomenon that causes air to leak into the bottom of a structure and out through the top. To stop drafts use the ABC method. A is for attic. Since this is where the conditioned air (and your energy dollars) are leaving your home, it must be sealed first. This is done with spray foam on top of every wall in the attic as well as around wiring and plumbing penetrations. Recessed lights, pull down stairs and attic hatches all must be properly sealed to keep the air inside the house. Sealing the attic results in less air entering the bottom of the house. Since it can't get out, less leaks in! Your basement and first floor will be more comfortable because you sealed the attic. B is for basement (or crawlspace). Spray foam around the perimeter of the wooden joists prevents air from leaking in. Crawlspaces should be sealed and encapsulated so they are warm and dry. New basement windows are also often part of a prescription for defeating drafts. C is for conditioned space. This includes windows, doors, outlets, etc. Notice these items are all last. You can feel these leaks because they're in the living space. But they are tiny leaks compared to the monsters lurking in your attic and basement. Never insulate without sealing your attic. The insulation will make your attic very cold in the winter. But since it doesn't stop air from moving, any moisture in the air from cooking, bathing, laundry, etc. will find its way into the cold attic where it condenses on cold wooden surfaces and starts mold growth.
Sorry but there is no good way to insulate a finished basement. The insulation needs to be placed in direct contact with the basement masonry walls. It does no good to insulate the framed walls of the basement. The cold comes through the masonry and fills the space between the masonry and framed wall. It then leaks out into the finished space. Never blow insulation into finished basement walls. It traps moisture and leads to mold growth. The only solution is to un-finish the basement, install 2-inch panels of foam board (polyisocyanurate works best) directly to the walls, and re-finish.
It depends! The BTU capacity of your home's heating and cooling systems should be matched to the heat loss (winter) and heat gain (summer) of the structure. Calculating BTU capacity requires more than just the size of the home. The amount of glass and it's orientation to the sun must be considered. The amount of insulation in walls and ceilings is crucial. The air tightness (or leakiness) of the structure affects the calculation. Is your ductwork in a harsh environment like an attic? You'll need more heat in the winter and AC in the summer to account for the losses through the ducts. The heat loss/gain calculations should be done by a professional any time comfort equipment is installed. Installing equipment the same capacity as the existing equipment usually results in over-sizing, poor efficiency, short cycling, and shortened equipment life.