Foam insulation in interior walls

According to the Material Safety Data Sheet (MSDS) for TRYMER(TM) 3000 Rigid Polyisocyanurate Insulation, there should be no problems (for this specific product anyway).

I also found the MSDS of an example Expanded Polystyrene Board, which does mentions off-gas issues. Though it only applies to large amounts of "fresh" polystyrene, being stored in a "confined, unventilated area".

fresh polystyrene contains residual pentane and if large amounts of EPS materials are stored in a confined, unventilated area such as a semi-trailer truck, pentane may off-gas and create measurable airborne concentrations.

If you know the specific product you'd like to use, it shouldn't be that difficult to find the MSDS for it on the internet.

I think based on the comments I better understand your scenario now.

Building Science has a lot of great information on basement insulation and the suggested method is to use XPS foam against the walls, optionally bats between the studs and no vapor barrier (since the XPS foam is the vapor barrier).

I would suggest that you use 1 1/2 - 2" XPS foam against the walls, and then space your studs another inch or so away from the wall (to allow your water to drain). If you need higher R values then the XPS provides you can use bats between the studs and I would suggest something like Roxul insulation which is stone wool instead of fiberglass since it is not affected by moisture like fiberglass is.

It would also be advisable to use steel studs so that they don't rot should they come in contact with moisture. You might also opt to put the bottom plate on top of a piece of XPS foam so that there is a less likelihood of the metal studs rusting.