[Greenbuilding] FW: Rigid foam on an old house

[Wayne Mueller]

Dear Green Builders,

I moving to a cape cod colonial style house in Wisconsin that needs new
siding put on it.  The house is 60 years old with 2x4 framing and cedar
shingles which have mold and rot.  I am thinking of putting on 2 inch rigid
foam over the sheathing, which is CDX plywood, and then putting on vinyl.
All seams would be caulked for good sealing.  The windows were replaced a
few years ago with good double pane replacement inserts so I don't want to
replace those.  To the best of my knowledge, there is insulation in the
framing.

My questions: 
Do I have to remove the windows, put the rigid foam on and then put the
windows on OVER the foam or can I leave the windows on and put the foam over
the windows?  
Are there any trim piece interface issues I should pay attention too?  
Are there any other significant issues that I should be aware of?

I am trying to make this update as cost effective and minimally consumptive
as possible.  Reducing heat loss is the main goal. I wish I could keep the
cedar shingles but they appear to be too far gone.

Any advice and suggestions would be most appreciated.

Thanks,

Wayne