I am planning to reside my 1943 Cape Cod with horizontal wood siding replacing the very poor aluminum which covers the original and even worse ‘fake wood’ shingle.  I intend to follow the advice I’ve seen several places and install the siding as a ‘rain-screen’, nailing it over furring strips to set it off from the sheathing by a little bit.  (E.g., Taunton’s “For pros” siding book.)  Also, I hoped to take the advice in FHB #160 (Jan. ’04) of covering the sheathing with foam insulation, either XPS or polyisocyanurate, then putting the furring strips over that, then siding.  This raised a questions for me, and I’d appreciate any advice. 

The windows (recently replaced, Pella double-hung) only extend 1-1/4″ from the sheathing.  Two inches of foam would go past the windows before they even had furring strips and trim installed; even one inch of foam plus 3/8″ furring strip would pass the outside edge of the window.  How can I use this insulation/ siding method and still tie attractive and weather-proof trim into the windows?  Of course, the same issue arises at the doors.