Ise writes from London, Ontario: "We would like to re-insulate our house and the way we want to do is to leave the old drywall in place and set up a new frame out of 2*4 that we will then fill in with insulation and install a vapour barrier before we put new drywall on it. We realise it will make the rooms a bit smaller but I am more worried about if that is a proper way or if it could lead to moisture/mold problems."

Answer: To answer your question completely, I need to know what type of insulation is in the wall now. Does it have a vapor retarder on it? If so, installing additional insulation directly in front of it may lead to the condensation and moisture problems you are concerned about. You don't want a double vapor retarder in the wall system.