A SIP panel is constructed from a slab of styrofoam laminated between two sheets of 1/2" OSB (Oriented Strand Board, or chipboard).  This rigid panel provides superior insulating qualities, as well as a solid wall.  Note that panels are applied to the outside of the frame.  Since there are no studs to interrupt the insulation, a continuous blanket surrounds the structure. 

The panels shown here are 5-1/2" thick, providing an R value of 24. Note that this is the same dimension as a piece of 2x6 lumber.  This SIP panel is recessed by 1-1/2" on the bottom, so that it can slip over the sill plate.  SIP panels are custom cut at the factory to fit each specific frame.  Electrical chases and rough openings for windows and doors are included.  Similarly, the rough opening for the window is recessed 1-1/2" to accept a 2x6 frame for the window.  A spline system is used to connect the panels to each other. 

Expanding foam is used to fill the gaps between the panels.  For more information about SIP panels, visit the Structural Insulated Panel Association.