Heating and cooling account for approximately 50% of the energy used in the average American home, proper insulation can make the home more comfortable by maintaining a uniform temperature throughout the house.  Insulation also acts as a sound absorber, keeping noise levels down. 

In a well-designed home, the effectiveness of insulation in a wall or ceiling depends on how and where the insulation is installed.  Energy efficient insulation specifications are in the range of R-20 to R-30 in the walls (including the foundation), and R-50 and R-70 in the ceilings.  Carefully applied fiberglass roll, wet-spray cellulose, or foam insulation will fill wall cavities completely.  Priority areas to insulate include the attic, under floors above unheated spaces, and exterior walls.

In every home, heat flows naturally from warmer to cooler spaces.  In the winter, heat moves from all the heated living spaces to adjacent unheated attics, garages, and basements, or to the outdoors; or indirectly through interior ceilings, walls, and floors--wherever there is a difference in temperature.  During the summer, heat flows from outdoors into the house. 

To maintain consistent temperatures, heat lost in winter must be replaced by the heating system, and heat gained in summer must be removed.  Insulation in ceilings, walls, and floors decreases this heat flow by providing an effective resistance to the flow of heat.

Insulation is rated in terms of thermal resistance, called the R-value, which indicates the resistance to heat flow.  The higher the R-value, the greater the insulating effectiveness.  The R-value depends on the type of material, its thickness, and density.  Installing more insulation in your home increases the R-value and resistance to heat flow.

The amount of insulation you need depends on the climate, type of heating (gas, oil, electricity) you use, and the section of the house that you plan to insulate. The attic is the first area to consider because it is accessible and therefore less expensive to insulate.

The effectiveness of insulation depends on how and where it is installed.  For example, compressed insulation does not work at its full rated R-value.  Also, the overall R-value of a wall or ceiling will be somewhat different from the R-value of the insulation itself because some heat flows around the insulation through the studs and joists.  More information can be found on the Web about shole wall R-values.