I used dense-pack cellulose insulation in my walls, but I won't use it in walls any more (I'll still use it for attic insulation). After reading Paul Fisette's article and others, I decided to go with dense-pack cellulose due to improved air tightness, sound attenuation, and ability to penetrate tight spaces. There was only one insulation contractor doing damp-spray in the province two years ago, and even he said he still did a lot of dense-pack work. During the winter for new construction he would not do damp spray as the water lines will freeze up.
Cellulose insulation is a bit more expensive than fiberglass. The best contractor pricing I've found for cellulose is $9.05/bag at Kent. Using the minimum 3lbs/cf density works out to 50c/sf to insulate a 2x6 wall. I've found R20 batts at Acadia Drywall for 38c/sf, so for materials cellulose is 30% more expensive.
Cellulose insulation provides more resistance to airflow than fiberglass, but the CMHC has shown that it's still a lousy air barrier. They have also shown that plywood or OSB glued & nailed at the edges to studs and/or blocking makes a great air barrier. In a climate where temperatures are below freezing for most of the winter, it's more important to make an airtight assembly than to add insulation beyond standard R20 levels. A reasonable target is 0.5ACH@50Pa (R2000 only requires 1.5ACH). When the temperature is -10C and a 20kph wind is blowing a two-story R2000 home (R25 walls, R50 attic, 1.5ACH@50Pa) will loose more heat from air infiltration than from conductive heat loss.
If you are set on cellulose for it's lower embodied energy vs fiberglass, I'd strongly recommend using damp-spray, and still build a good exterior air barrier. Although manufacturer specs say cellulose doesn't settle when blown to 3lbs/cf, I've found at least 4lbs/sf is required to avoid settling. I blew cellulose into 2 22.5x48" 2x6 wall cavities behind 6-mil poly. After 2 years I
had more than 2" of settling at the top. I removed the insulation from one of the cavities and weighed it; 14.8lbs which equates to a density of 4.3lbs/cf. Some of that could be moisture absorbed, but the specs state a maximum of 20% water absorption which would still leave 3.6lbs/cf. Testing by the Nordic Innovation Centre shows cellulose at 3.1lbs/cf settles to 4.2lbs/cf when exposed to humidity cycling between 50% and 80% and pressure less than the weight of 3ft of cellulose above it (300Pa is equivalent to the weight of 2' of celluose at 3.1lbs/cf). I suspect adding in temperature changes from 30C to -30C would further increase settling.
Testing has also shown that settled density is a function of blown density, so to ensure no settling after humidity cycling cellulose would likely need to be blown to densities higher than 4.2lbs/cf.
Photo of cellulose test behind 6-mil poly