had a special report on doing just what you are about to tackle.
For the cement walls, check out a product by UGL its a paint/sealer/primer for painting cement/cinder block walls to stop water weeping and leaking. Its like a block filler, if you will.
Then the article sort of went by the way your planning. Seal the walls, install that 1/2 inch compressed insulation, install furing strips and go with 1/4 inch rock or go straight paneling.
I would not take the furing strips, rock, insulation, paneling all the way to the bottom. I would stop short about 2 inches from the bottom. I would fill in the rest with higher than usual floor molding. My thinking is not to have any osmosis of water if the floor does get wet or leaks. This would save the walls up to 2 inches and only ruin the moulding which is cheap.
Then get the new all plastic molding and be safe all the way.