Packing insulation inside your walls will help keep the inside of your walls from resonating at loud volumes(which is good), but your worst nightmare are room reflections and broadband absorption is the answer. Carpeting, drapes, and furnishings will absorb a small slice at the high end which is a plus, but they do little or nothing for lower frequencies.
What you need is bass absorption(bass traps) in the corners, and absorption panels at the first reflection points(ideally front,back, sides where room layout allows). Four inch thick acoustic panels will work wonders for your room in this regard.
http://gikacoustics.com/index.html
Something like these..........
The more people read about the subject, the more confusing it gets, but knowing the basics for positioning(traps in corners...etc, etc)is all you really need to know. Once you hang them, you'll be suprised how much better your room will sound. Most people get overwhelmed when they research the subject and simply give up, but simply hanging panels at the first reflection points and corners will do the trick.
You wont believe how much better your room will sound. After 10 years of HT without treatments, I recently took the plunge, and it was a revelation to say the least. I used the KISS formula, and let someone in the ecoustics business position the panels, and all I had to do was hang them. I didnt get too hung up on the technical stuff. I just wanted to know where to hang the darn things to make my room sound better.....LOL For me, the process was a simple one, and the improvement was remarkable.
See this section for discussion on the topic.
http://forums.audioholics.com/forums/forumdisplay.php?f=10
There are people in this forum who really know that they're talking about on this subject(unlike me). I am merely a newby who has seen the light and experienced the differences first hand. I can go into detail and describe the differences, but you'll find a lot of that discussion in the above forum.