An animation on a CD that I produced with the Reader's Digest several years ago showed clearly why you should insulate the entire wall all the way down to the floor. No, you won't freeze anything outside, as the important footings are below the frost depth anyway and there is always some heat loss through the floor to boot. If you don't insulate all the way down to the floor, you'll never be able to make a comfortable basement.
Last Updated: Friday, October 20th, 2017, Created: Tuesday, September 14th, 1999
Full height basement insulation? An animation explaining why the answer is YES.