Looks that guy is in a crawl space. I don't know anything about polystyrene but it looks like styrofoam. In a crawl space i trust that more than fiberglass. Whatever you do do NOT install fiberglass in a crawlspace or anywhere where a potentially high humidity will occur. Prev owners of our house tried that and the fiberglass deteriorated beyond (almost) recogination

Polystyrene is a good insulation material, but flammable. I never have saw it used in floors but here is used to insulate external bricks walls, inner walls and ceilings, it's very durable and can block humidity. And is cheap, at least here.

"The thermal resistance or R-value of polystyrene foam board depends on its density, and ranges from R-3.8 to R-5.0 per inch." It's higher that mineral wool for example
http://energy.gov/energysaver/articles/insulation-materials

I don't think is more environmentally unfriendly than other insulation materials, most insulation materials contaminate a lot.

If you are insulating a crawl space in the north be very careful how it may affect your water lines in the winter. You don't want them to freeze. Talk to experts before doing this.

In one of the comments about installing fiberglass insulation in a crawl space. I have a story & 1/2 older home. I have a space on both sides of my house but I call it under the eaves, is this the same as your talking about because I laid fiberglass insulation there. It can breath as it is vented I take it from the eaves. Would this be OK, I have a floor out there also?

Sophie gave a good advise, you should insulate your crawl space walls also and make sure your crawl space has proper ventilation to prevent entrapment of moisture and mold issues.
As the floor joist insulation goes, use R-30 insulation with with a vapor retarder and make sure that the vapor retarder facing up towards heated area of the home. Place insulation between the floor joists, and secure in place using insulation supports made specially for overhead installation, some use wire which is sold in most Box stores already pre-cut, etc.

Ask a trained professional since you might also make bedding for Critters to stay warm like Field mice and other

Also ask you Local Building Inspectors for a feasible solution because your insurance might not pay for what you add.....go to local Building Place Like Home Depot and get some Ideas and samples bring to a place where you can safety testing on all Bring a Fire Extinguisher

We installed (or at least tried to install!) this type of underfloor insulation . What you have to keep in mind is that they make it look very easy in the ads (here in New Zealand) but that it is only easy if the joists are spaced exactly the same size apart as the width of the polystyrene sheets. They are an absolute nightmare to try to cut to size - and we are very experienced renovators. It was an older type home with different spaced joists so we gave up after we had just the floor under the living room done. Over here you can get underfloor fibreglass insulation with foil on both sides and an overlap that you staple to the joists - definitely our choice next time!

For this intent and purposes the best is to consult the appropriate professional. Its the best way to go.

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My wife bought a house about a year and 1/2 ago. The builder sprayed an insulation, under the house. This is the type like I have seen in commercial metal buildings.

The stuff stays on the wood, so get the picture, that it's basically molded to the floor joists of the entire house.

This definitely made a difference. Even though we don't have snow here, I lived in a raised house for many years and the floor was always cold in the winter.

This house wasn't, I plan to do that in the house we are about to build.

I'd go for cellulose insulation. It can be blown in place, and it handles moisture well, etc. Be careful with vapor barriers/retarders.. There is likely one already below floor material and adding another one into the crawl space insulation will for sure cause problems.

I had no idea there were so many insulation methods! It looks like everyone has their own method. I also don't blame you for wanting a more eco-friendly option. A lot of insulation methods have proven to have some pretty bad effects. My husband and I are looking to insulate our home again at some point in the near future. Hopefully we can find a good method that works for us! I hope everything worked out for you, Neryl! http://www.warmhome.ca