Here I am, fighting the tryptophan!

Except for a few areas of the Deep South and southwestern deserts, basement insulation is recommended across the continental US.

Source: U.S. Department of Energy--Energy
Efficiency & Renewable Energy

But say you don't care, whatever the reason.

Then, unless you are in the far, far North, poly on a basement wall--top to bottom--is an invitation for moisture problems. Your basement feels dry now because the uncovered walls are permitting drying both to the exterior and interior, depending on the season. Once you apply poly to the wall, you are inhibiting the outward drive--warm to cold during the heating season. But in the summer, the drive to the interior is trapping moisture behind the poly and while some of it may condense and run to the floor, much will not and will feed mould growth on the wood and masonry walls.

Note too that this simplified view ignores the fact that: 1) the poly will not be a perfect vapour barrier; and 2) other mechanisms of vapour transport--groundwater leakage and capillary wicking-- will short-circuit the tightest poly barrier.

Here is a link that might be useful: Basement Insulation Systems

Sorry for the bad link. Try again.

Here is a link that might be useful: Basement Insulation Systems

Worthy,

I wasn't expecting an answer so soon -- thanks! This means I can get started first thing tomorrow.

Thank you for knocking me back to my senses. I drew the same conclusion readings tons of your posts, but the attraction of less work clouded my judgement again. I'll put up 1" XPS against the block and seal as well as possible. I suppose I should keep it slightly above the perforated drain along the edge so as not to block it.

I did have one more related question. I'll be painting the ceiling black rather than finish it or cover it. Does that mean I also need to attach pieces of XPS to the top of the block wall or can I let any escaping moisture dry inwards into the conditioned basement?

Thanks again.

No school runs, no crews at work this Boxing Day morning. Slept in.

I suppose leaving the rim alone might work from the point of view of allowing vapour flow both ways. But not raising the dewpoint on the interior still might lead to condensation on the block. (I don't know your climate.)

For sure, though, leaving it as is would nullify the expenditure of time and money used to insulate and seal the rest of the wall. Most of the thermal inefficiencies are at the upper portion of the wall (abovegrade) and at the points where the foundation meets and is attached to the framing. Rising damp will still be coming from the uninsulated tops of the blocks.

You can insulate and control vapour flow in the rim area by using foam board and lots caulking and small cans of polyurethane spray, such as Great Stuff. Or simpler, the whole area can be sprayed with closed or open cell polyurethane, professionally or using diy kits.