[S-F]

I agree that putting it on the outside is the best bet. You must not have a vapor barrier in the wall already though or else you create a vapor barrier sandwich and the wall will have drying issues. There is a ton of information out there on how to do it but basically you screw the foam to the studs through a piece of strapping and then attach the siding to the strapping. The screws you use are made by FastenMaster and are called HeadLOCk. They have a really flat head and are super strong. I have also heard rumors that SimpsonStrongTie is making a similar and cheaper screw but I have yet to find them. The biggest problem will be the window details. You don't want your walls willing up with bulk water from rain. If this is too much or you don't have enough foam then put it under the floor and make sure to tape all of the seams and foam around the edges or it will do little. I worked on a house where they had done this and didn't air seal the boards. It made almost no difference until the air sealing was done.