B> Any insulation on the interior side of the foam needs to be allowed to dry toward the interior. Air-permeable batts wrapped in plastic WILL eventually take on some moisture, but would take forever to re-dry.
DougB: As a degreed engineer why not do the math? Just the above-grade portion of the foundation in most homes in MN would represent on the order of 20,000 BTU/hr of heat load at the outside design condition (in Albany NY it would be more like 15K) and a large fraction of an otherwise reasonably insulated home's heating fuel use. In a 965' town house in Albany wedged between 2 other units it's probably half that. Say you have only 60' exterior basement perimeter, with 2' of exposed above grade concrete with U-factor of 1.0, and another foot of band joist with a U-factor of 0.5, at Albany's 99% outside design temp of -2F and an inteior temp of 68F that's a 70F delta-T on 120' of U1 concrete for 8400 BTU/hr plus 60' of U0.5 wood for another 2100 BTU/hr, or 10,500 BTU/hr total. If you insulate that to R20 you're in the weeds at well under 1000 BTU/hr- the place stays warmer & drier, both winter and summer.
Finishing it without insulation would be a mold hazard (and in some places, a code violation). Also, water sealing the wall from the exterior of does not keep the concrete from wicking up from the footing, which is best allowed to dry toward the interior, especially if you have less than a foot of exposed exterior to dry toward. If you use foil-faced iso, leave the bottom 8-12" either uninsulated, or insulated with unfaced EPS.