What's the best way to insulate and drywall a cement block wall (above grade)? It has to be flush to the wall. We're thinking using the rigid sheet insulation to keep the assembly thin. The wall is about 12 x 8.

Furr the wall? Metal or wood furrs? Glue? Screws? We're not sure how to work with these cement blocks. Are there moisture issues, and how to deal with them?

This is the best way to insul a block wall above grade or below grade.

YouTube - Best way to insulate a basement 800x600 (http://www.youtube.com/watch?v=4jSuWbdJy5A&feature=related)

YouTube - Install Rigid Foam Insulation in Basement Video (http://www.youtube.com/watch?v=oNE1QQreOkA)

Typically won't have moisture issues
Above grade. I hesitate to hammer into a cmu wall. 1" rigid foam gives you R6-8 depending on composition. I would use 3/4 pt 1X4",glued and occadionally screwed to the wall and then 3/4 foam, 1/2 drywall glued to the furring. Outlets?