First you will need to solve your moisture problem. Make sure you have proper drainage on the lot. The sump is working properly. Most important the walls have the proper outside moisture barrier. Or if that is not possible seal the wall on the inside with water proofing.
A rigid foam insulation is best for concrete or block basement walls.
For more information:
Read "We need a safe and effective way to insulate our basement concrete walls. Which wall stud configuration and insulation are recommended?" a Q&A answered by Adam Hillhouse.
Check ourbasement moistureQ&A to see what other homeowners and contractors are saying about vapor barriers, insulating foundation walls, etc.