Advancing energy codes include high-performance wall insulation details. One new wrinkle for many builders is walls built with fiber insulation between the studs, plus rigid foam insulation applied over the outside walls.

It adds up to a robust system: the foam on the outside keeps the wood frame inside the wall warm and dry in winter, and repels outdoor heat and moisture in summer.

http://www.builderonline.com/siding/siding-over-rigid-foam.aspx