I've professionally finished basements using traditional construction materials and I've seen the Owens Corning product installed. The biggest advantage to the Owens Corning product is speed of install and minimal mess. Should the basement flood the product should dry with minimal damage and individual panels can be replaced should one be damaged. As to the negatives:
At the time I was doing basements the Owens Corning product was double (or more) than what I would have charged for the same space.
Because it's essentially a "franchise" type business, quality of the install may vary. I noticed a considerable difference in the quality of the trim work in the basements I was in.
A number of people have reported extremely high pressure sales tactics
There are very few choices as to finishes. At least when I was involved the panels came in one color and to me looked kind of "commercial" (think office cubical). There were about 3 choices in ceiling tile panels as well. That may be an advantage to folks who aren't good at making design decisions.
Building Science Corporation has some excellent information on insulating and finishing a basement. If you decide to use traditional materials I would strongly recommend reading through what they have to offer.
Certainly drywall and water don't mix. As I recall the Owens Corning product is relatively unaffected by water but the surface may show staining. I can't comment on mold.
Any moisture issues must be addressed before finishing a basement. If you have a sump pump, then a backup system is also a must. For new construction, I would recommend waiting a year before finishing a basement. That gives you can opportunity to experience all four seasons to see if there may be any problems with moisture.
What do you suggest for addressing moisture issues?
The house is 3 years old and there is no appearance of water in the basement but is very moist. Will surely use a backup system for sump pump. Any other pointers for installing bathrooms in the basement please share.