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I think that lining an observatory may be a double-edged sword because at night time, you actually want the inside temperature to mirror the outside temperature, and having insulation in the way could slow that process. I suspect that if insulation were added carefully, there could be an overall benefit.
As Jase indicated, managing the air flow is a smart move, as is having a reflective external surface.
The whole question of heat transfer reminds me of the teaser about cooling a cup of tea: Are you better off letting it cool for a few minutes and then adding milk, or putting the milk in and then letting it cool?
Chris
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