I am looking to finish my girlfriend's attic (in a 1 1/2 story house, it's the half-story) and am wondering if the "paneling" that is currently on the walls would serve as proper insulation. The paneling appears to be made of compressed cellulose, and is 1/2" thick, and has been there since she moved in to the house 4 years ago. She has asked a friend of hers, who also does drywall, if this would be adequate insulation, and he stated it would and that we should just drywall over it. This would definitely save us time and money if we did, but is this a normal practice? Likewise, if we do drywall over it, what would be the method of "trueing up" the new drywall surface with the window and door frames?

When I made my receptacle box cut-outs in my drywall, in a few instances I ended up with up to one inch gaps between the drywall and box. How do I fill this in? Joint compound? Little pieces of drywall? I kept the cutout pieces, just in case...