Any interior drainage system will not stop water coming through the rubble walls. That's the nature of rubble walls. You can clean and parge them from now to forever and water will seep through. If you're not waterproofing from the outside--a potentially risky job with rubble walls--what you can do to keep the space dry is provide a way for the seepage to drain away. Then you can insulate the walls and finish in front of them. Unless relief cracks or separators were used in the slab, cracking is par for the course and isn't necessarily the result of hydrostatic pressure. Also, rubble foundations didn't require concrete floors to brace them laterally. See link below for detailed information on how North America's most famous building scientist tackled the same job. Here is a link that might be useful: Rubble foundations

Without pics or measurements it's impossible to give an accurate answer. Shrinkage cracks are standard. As it cures, concrete shrinks about 1/16" per ten feet. The mandatory government warranty programme Construction Performance Guidelines I work under say the following about poured concrete foundation wall cracks: "1.11 CONDITION CAST-IN-PLACE CONCRETE FOUNDATION WALL IS CRACKED Acceptable Performance/Condition Cracks resulting from normal shrinkage are acceptable; cracks in excess of 6 mm in width are not acceptable. Warranty One-Year Work and Materials Cracks resulting from normal shrinkage of materials caused by drying after construction are excluded from the statutory warranty. Action Walls with cracks exceeding the acceptable condition shall be repaired. Remarks Concrete walls naturally crack during curing due to shrinkage. Where lateral or vertical movement is evident, further investigation may be required. The colour and texture of a repaired area may not match the surrounding concrete"

The ACI sells it for $58.50. There are other construction book sources but I doubt they are cheaper. It's not a long document so if you have specific questions I may be able to answer them or post a section from the standard or other ACI standards. Hopefully your contractor owns a copy. In many areas the soil at footing depth is consistently granular, well drained, and free of organic material. It can usually be verified by sight, smell and feel (if it's black, squishes through your fingers, or stinks, you have a problem). Sometimes there can be a layer of organic material from the bottom of a swamp, etc. and it must be removed. Organic material will continue to decompose and will allow the footing to settle. Reinforcement in the bottom of a deeper footing can help bridge local areas of poor soil but not larger ones. Deeper in the ground is also better and so is reinforcing in the stem wall but if you build over an underground stream or a sink hole all bets are off. Relax, I'm joking. A geotechnical engineer is only needed when the person in charge of the design or construction is in doubt. I've only hired one when the soil didn't look like we expected it to. I've only drilled for soil analysis samples for a multistory commercial building. Here is a link that might be useful: ACI 332

Technically 1" of XPS versus 2" of XPS would be about half the cost. So, is that worth the savings ultimately? I will not have in floor radiant heat for the basement. When you say slab I keep thinking you mean a slab built house, to reiterate, this is a basement and local code *here at least* does not require ANY rigid foam for the basement slab. Not sure if it even is required on the foundation walls. I guess this zoning ordinance is behind on code updates. -shrug- I see myself as one in a few that will be considering rigid foam for any basement application in new construction here. Is there any benefit to using XPS over the EPS for the foundation WALLS? I know I can get some EPS cheaper per R-Value but it will be thicker. I was thinking over 2" of EPS foam would be troublesome to fasten and then cover. Any recommendations on what to cover the foam with before backfill? Or should I only worry about covering the exposed foam on the walkout basement portion? I intend on using a waterproofing prior to installing rigid foam to the foundation walls.