"Furring out" is the process of building a wall inside another wall. In renovations, this often takes the form of a new 2x4 stud wall built adjacent to an existing exterior masonry wall (see photo). Furring out allows for HVAC, plumbing, and electrical systems to be run easily and also for insulation to be added to increase energy efficiency. Carefully consider the following implications as you are deciding whether to fur out the walls in your project:
Benefits include better energy efficiency, ease of installing new systems, you can provide a new flat wall surface, and you can cover damaged plaster easily. Carefully weigh the costs versus the benefits.
See also the article on vapor barriers.