r 30 insulation in my downstairs basement
Matthew, 

The auto-ignition temperature of paper (the moisture barrier on fiberglass batt insulation) tends to be between about 425-455 degrees F (depending humidity, altitude, etc.).  The auto-ignition temp. of other substances will vary.  Hot water heaters are capable of being set above the 120 degrees F max. but 425F is far above that.

Condensation will happen.  There is no practical, absolute preventative (though many will argue there is but these measures tend to conceal the condensation rather than prevent it).  

The two most effective (imo) measures are: 

1) pipe insulation (to create an "as effective as possible" barrier between hot and cold water to the surrounding air temperature) and, 

2) air flow (to allow for evaporation of any condensation that will occur...though "air flow" can also introduce air temperatures that can further encourage condensation).

"Excessive" insulation at the rim joists of a basement (between the concrete foundation wall and the floor joists) is where people can control outside temperatures from infiltrating a finished basement.  I say, "excessive", because this is where most people don't use enough or don't install it correctly.  It is in this area where joist cavities get temperature fluctuations (not to be confused with "air flow") between the basement's finished ceiling and first floor.

Most condensation, from pipes, is most notable in ceilings directly below a vertical run of the pipe...condensation from the pipe runs down its vertical length onto one spot of the ceiling.  For this (and reason of "access") there's no legitimate reason to not provide a removable access panel in the ceiling.  We camouflaged ours to appear as an audio speaker panel though it's just a drywall cut-out.