Sealing Walls
If you find black stains indicating mold, use muriatic acid to clean them, hosing down well and insuring proper ventilation. Do this process a couple of times.
Once clean, the walls can be sealed in several ways. Typically used is Drylok, but a more superior product is Xypex (I could not find this in any hardware store near my area. Sent an email to the company, waiting for response). Drylok is a latex based waterproofer, while Xypex, which is more expensive, relies on the presence of water to activate.
Insulating your basement walls
The most common choice for basement insulation is fiberglass batts. They’re easy to work with, inexpensive and readily available. In any finished basement wall, before closing in the wall you need to have a vapor barrier that prevents moisture transfer between the warm room and the cold insulation behind the wall. A vapor barrier can be provided by ‘faced’ fiberglass bats or by covering the entire wall and the insulation with an unbroken sheet of 6-mil plastic.