Second Story Insulation Question

Last weekend, I tackled a renovation project in our second story master bedroom.  Our house is a story and a half brick that was built in the 40's.  A bathroom was put in the second story in the past 15 years or so, but the remainder of the upstairs was old composite-board walls.  After tearing the comp board off the walls, I was greeted by Balsam Wool insulation.  I checked online and it appears relitively safe, but also has an R value of 2-3.25.  It is still in good shape as the bats are secured to the studs pretty well, but I'd like to update the insulation.

My question is how should I go about improving the insulation of the upstairs?  My head tells me that I'll be best off removing the Balsam Wool and replacing it with new stuff, but I've read other places online to simply add insulation.  We had new windows put in this spring with great efficiency and want the rest of the upstairs remodel to follow suit.

Just my opinion.....

Houses now days are buttoned up too tight and must bring air from the outside in, I for one like for my house to be able to breath on it's own. However, in your case I would replace what you have now with an R- 13 faced for the walls and a R- 19/30 ( depending on rafter size) for the ceiling. Now that the walls are open it's good chance for you to upgrade the electrical and what not in that space. Good luck with your project and if you can give us some pictures, we love pictures.....

http://www.homedepot.com/Building-Materials-Insulation-Fiberglass/h_d1/N-5yc1vZbay7/R-202585857/h_d2/ProductDisplay?catalogId=10053&langId=-1&storeId=10051

As Ron said, a house needs to breathe a little and putting in a second layer of insulation kind of defeats that purpose. I would take out the old and put in the new with an R value appropriate for your climate.

Speaking of breathing, I would also check the duct work for your HVAC system and make sure that's up to par.