Caulk or foam, whichever works best. Best tight to the rim. But in no case should a batt be used other than on the inside of the XPS, that is, towards the interior of the basement. Use a minimum 1" thick XPS.

Cut the pieces about 1 inch undersized in both dimensions, then fill with foam.

If you wedge them in you cannot get foam in to seal things up.

I usually put a bead of foam on the bottom of the piece, then set it in place and foam the other three sides.

Is bat even needed or will the XPS take care of everything?

One inch of XPS has an R Value of 4.5-5, which should be sufficient to prevent condensation on the rim. However, it is way below the recommended insulation values for your climate. The US Department of Energy recommends R30 for walls. The rim area, which is abovegrade is, in effect, a wall. So any suitable insulation up to that R value will be effective. At the least, I would add batts. You could also use EPS (expanded polystyrene) in addition to or instead of the XPS. It has a lower R Value per inch than XPS, so you'll need more. But it's cheaper. Polyisocyanurate boards with a foil covering will give you up to R8 per inch and are usually not required to be covered by any other fire resistant materials.

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I find it virtually impossible to use the handheld foam can upside down in the cramped spaces between the joists. So I cut the foam tight and use caulking. But maybe that's just me!

"I find it virtually impossible to use the handheld foam can upside down in the cramped spaces between the joists. "

Throw the little straw that comes with the cans away and purchase some nylon tubing.

Slip the tubing over the nozzle and you have a nice flexible applicator to put the foam were you want it.

The tubing is cheap enough I do not even waste acetone trying to clear it out.

Neat trick!

I think you need to face the xps with drywall too for fire safety....

need to face the xps with drywall too for fire safety

Yes.

But if you spray foam the rim joist area with medium to high density foam, no thermal barrier is needed under the International Residential Code, adopted in most of the US, as long as the maximum thickness is 3.25".

that interesting...does it not burn?

I don't get it either!

A plumber accidentally lit a tiny section of ccspf in a house I was building. No flames, but the acrid odour from the one square inch section drove everybody out of the house tout suite. I would never leave it uncovered in a house I built. In that case, I sprayed the rims with a 1/2 inch of plaster.