Hi Bob: and readers: I am finishing off the 800sf basement in my house. I very efficently placed visqueen all around the walls before I furred them out with 2 x 4 studs and preasure treated floor bases. The city inspector came to inspect the framing (my wife was home for the inspection) The inspector proceeded to demostrate for my wife how we needed to slash apart the visqueen from top to bottom to let moisture through. He said we need to do that for the whole room. He said, "If water comes through the wall you dont want it running down to get you carpet wet" I'm confused; if water comes in it needs to go somewhere. If water comes through and gets to the insulation and wall will I be worse off then it running to the floor and getting into the carpet, right? I have this scary vision of moldy insulation and drywall. The insulation I'm using is r-15 and will most likely be touching the cement walls. Any thoughts to help calm my confusion before I slash the rest of the walls pending the inspectors next visit? This is our 4th month in the house and there was no noticable water marks before we started the project. Thanks for any advice.