Yeah, that's the shit.
layer it up to fill the depth of the wall cavity, cut it so it fits loosely, use a couple of nails to hold it in place. (drive em sideways into the studs, then bend them to apply pressure to the boards to keep them tight to the wall) Use expanding spray foam to fill the cracks. A little dab'll do ya--it really expands. Trim the spray foam when it dries and re-rock the wall.
You can use odd pieces too, the foam glues it all together. Just be sure that the spray foam doesn't get behind the board and push it away.
Here's a photo:
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And now I'm finished posting.
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