I will be using steel studs to finish off my basement as well, when I insulate with regular insulation should I put the moisture barrier on the side facing the foundation wall instead? I'll be using sheetrock to finish.
(*Disclaimer*) Please keep in mind that the following guidelines are true in my area where we experience hot summers and cold winters. The building code requirements in your area may differ.
Short answer: you need BOTH a moisture barrier on the exterior wall and a vapour barrier on the warm side of the insulation and studs. In a basement, you are battling two problems. One is water from the outside trying to get in. The other is warm moist air on the inside coming into contact with cold surfaces and condensing.
There are a number of ways to prevent water from finding its way into the interior living space. The most common solution that is currently used in new construction is a membrane, such as the Delta membrane, that wraps around the exterior of the foundation to keep the foundation dry. Because of the excavation required, installing an exterior in a retro-fit situation may be expensive. Membranes can also be used on the inside in combination with an interior drainage system. (http://www.deltamembranes.com/)
In my case, in our previous house, I used a common DIY solution: paint-on waterproofing. Xypex and Drylok are two such products. Drylok is basically a thick paint with Portland cement that coats the surface. Xypex needs to be mixed with water and needs to be kept damp for a couple of days while it crystallizes, filling the pores in the concrete.
Inside the house, you have warm moist air that will condense if it comes into contact with a cold surface (such as the foundation wall). The purpose of the vapour barrier (typically 6 mil polyethelene) is to prevent this from happening. Be sure to seal all the seams well. You will need acoustic sealer and vapour barrier tape.
When using steel studs, you have to consider that metal will transmit cold, which means that you could end up with stripes of moisture on your drywall, about 1 and a half inches wide, sixteen inches on center. That is why I recommended a thermal break such as foam board insulation. Wood does not transmit the cold as much as metal.
Also, be sure to use a sill gasket between your bottom track and the floor, to prevent damage from any moisture that may come up through the slab.
Once again, be sure to check the building code requirements in your area. Hope this helps.
