From the 2006 IRC. (underlining is mine)
- - - N1102.1 Insulation and fenestration criteria.The building thermal envelope shall meet the requirements of Table N1102.1 based on the climate zone specified in Table N1101.2.

The area around the window is part of the wall, thus, that space is required to meet the 'Wood Frame Wall R-Value' column for your climate zone - Zone 2 R 13.

Then (to continue with the 2006 IRC).
- N1102.4 Air leakage.
- - N1102.4.1 Building thermal envelope.
The building thermal envelope shall be durably sealed to limit infiltration. The sealing methods between dissimilar materials shall allow for differential expansion and contraction. The following shall be caulked, gasketed, weatherstripped or otherwise sealed with an air barrier material, suitable film or solid material.
- - - 1. All joints, seams and penetrations.
- - - 2. Site-built windows, doors and skylights.
- - - 3. Openings between window and door assemblies and their respective jambs and framing.
- - - 4. Utility penetrations.
- - - 5. Dropped ceilings or chases adjacent to the thermal envelope.
- - - 6. Knee walls.
- - - 7. Walls and ceilings separating the garage from conditioned spaces.
- - - 8. Behind tubs and showers on exterior walls.
- - - 9. Common walls between dwelling units.

- - - 10. Other sources of infiltration.

Your reference N1102.1.10 is in the 2003 IRC, so the 2003 reference for the above thermal envelope wall insulation is:
- N1102.1.1 Exterior walls.
The minimum required R-value in Table N1102.1 shall be met by the sum of the R-values of the insulation materials installed in framing cavities and/or insulating sheathing applied, and not by framing, drywall, structural sheathing, or exterior siding materials. Insulation separated from the conditioned space by a vented space shall not be counted towards the required R-value.

Simple answer - Yes, those cavities are required to be insulated *for both* thermal insulation and air infiltration and exfiltration reasons.

Jerry Peck, Construction / Litigation Consultant