Yep, I agree with the other folks--Hardiplank is the nicest (but costliest and will ebentually need repainting), then vinyl, with AL at the bottom.
Regarding insulation--if your walls need it, this would be the time. If your home is older and has no/insufficient insulation in the stud bays (e.g. less than R-13 for most locations), cellulose can be blown in or you can use foam-type insulation. The contracftor will need to cut holes in the sheathing, but the new siding wil cover it up. Also, even if your home has a good quantity of insulation in the stud bays, it often makes sense to put approx 1" of foam sheathing under the new siding. The foam material costs very little, the only noteworthy costs will be some additional trim work (since the window openings will be thicker, etc). Although the foam will only provide an additional od R-3 to R-6 in typical thicknesses, it gives two benefits that are well out of proportion to this R-value:
1) It dramaticaly cuts thermal bridging from the inner wall surface to the outer wall surface that occurs through the wooden studs. Though you may have R-13 insulation in the stud bays, the wood studs have an insulation value of only R-4.4, and these (as well as ducting, pipes, etc in ter wall) usually make up about 25% of a home's wall area. Foam insulation on the outside wil cover all these areas.
2) In many cases, adding this foam will move the water vapor condensation point outside the stud cavities. Any home in a cool climate has the potential for water damage/mold if water vapor condenses to forms liquid water inside the stud cavities. Vapor barriers can help, but in the real world they are never perfect. By keeping the stud bays warmer, the foam helps to prevent the condenastion of water inside them during the winter. That is a good thing.