Steve asks: "I have a question about insulating a home from the exterior. My house has got wood siding and I'm going to be removing it and replacing it with vinyl siding and when I do I want to insulate certain areas with blown in insulation but I heard that it settles over time. So if it starts at 8 feet, will it settle 3 to 4 inches?"
It is possible that blown in insulation will settle and it has certainly happened. But if the insulation is properly installed to the specified densities by a competent worker, it will not settle. That is true of blown in cellulose, fibreglass or rock wool.
If you have a house that has imperfect insulation in it, it is usually difficult to get into the walls to solve small settlement problems. Both for problem houses, and for houses where you are going to be taking off the siding, drilling holes in the outside of the house for insulation, and then replacing the siding, do not miss the opportunity to add rigid foam insulation over the entire wall. This will cover not only any insulation gaps, but the wood studs as well, giving you an old house with walls as good as those in R-2000 houses. And since you are changing the siding anyway, this is the most economical time to add this insulation. In fact, you won't even have to seal up the holes made for blowing in the insulation if you cover it all with rigid foam. The combination of full cavity insulation and insulated sheathing makes for the most energy efficient house we have today.
To understand more about loosing energy through the studs themselves, take a look at "Thermal Bridging".