basement finishing questions

I plan to finish a small 10 X 13 ft room in my basement. Because space is at a premium I plan to flat frame 2 X 4's with 2 X 2 top and bottom plates, use XPS insulation and cover with 1/2" drywall. 2 of the walls are against a poured concrete foundation. My questions are:
1) I have done a google search and read many books and am confused as to which side (if either) should be covered with plastic sheathing. Some recommend covering the foundation walls; some suggest that the plastic should be sandwiched between the insulation and the drywall; some suggest to do both and, an increasing number of people, suggest doing neither. I live in a cold climate (midwest). Is there anything new or definitive on this subject? Any consensus?
2) any drawbacks (or advantages) to painting the foundation walls with waterproof paint (I understand that Drylock only lasts about 5 years)?
3) should I put firestops between the studs or is the top plate (2X2) sufficient for this purpose?
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1.) Vapor barrier goes on the warm side of the studs 2.) None that I know of but I think Drylok is wasted effort. If you have water leaks, don't finish your basement. 3.) No sure.
HL wrote:

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