Although most new houses are insulated with fiberglass, I've decided to use a spray foam insulation. It's not inexpensive, but has several advantages and should be well worth the extra cost in the long run. The house has a complex roofline and I have found that it's very hard to insulate and vent roofs like this properly with fiberglass. Spray foam completely fills the roof cavities, provides a very good air barrier and doesn't need to be ventilated. Icynene is almost the Kleenex of spray foam insulation, but there are many others out there.
I had planned on using dense-pack cellulose in the walls, but that would have required two seperate insulation contractors and, in the end, wouldn't have saved much money. The cellulose is effective at filling voids and provides good resistance to air infiltration, but spray foam is even better.
This is BioBased polyurethane insulation installed by VIP Marina. It's an open cell product that has kind of a sponge cake consistency. It expands greatly and in the unfinished attic areas it extends beyond the rafters.
Elsewhere it has to be trimmed flat. This is what it looks like before trimming. It gets lopped off with a Sawzall(tm) with a ginormous blade.
The photo also shows the doors, which were delivered prematurely. They weren't supposed to come until after the plaster was complete. The whole search for the right door is a story for another time.
All the trimming, though, does generate a good bit of scrap.
And there was much more after I took this photo.