First off, find the pit calculator on the home page and add in your dimensions. It will then calculate the sizes for your firebox, chimney, throat, vents and gap.
The calculated size for the firebox can be round or square and does not change of insulated. Personally, I like a square firebox as they are easier to work with and your options for adding vents in the proper places are much better. Interior space also seems a little less cramped and adding a log basket is much less complicated. Insulating helps to cut down on heat loss (and can somewhat decrease fuel use). If you live in a cold or windy climate I would say it is probably worth it. Safety is one of the biggest reasons for it tho as the outer skin stays several hundred degrees cooler and will not require a trip to the ER if touched. Your pit will run fine either way.
Most agree that 0.25 is a good benchmark for fireboxes. If you decide to insulate, the outer skin simply needs to hold the insulation in so something in the range of 20g is more than enough to resist dings.