I wouldn't recommend using any modern materials like polystyrene. Look at it this way - when it was built, did they use polystyrene? I'm not sure how polystyrene would interfere with the natural ability of the bricks and mortar to breathe. I doubt there are any advantages. If you're thinking of using something behind the mortar just as a support trust me it really isn't necessary.
I suggest using a mix of 5:1:1 sand:lime:cement. Let it dry for a few days before you operate the window, so it doesn't crack. Lime mortar is better than cement mortar, because normal cement mortar doesn't allow water to permeate, which can mean damage to the face of the bricks during winter - whereas lime mortar allows water to permeate, which reduces the amount of water that freezes in the brick. My windows have been like this for 95 years, and they're working perfectly!
I think what you suggest for the cill would be fine. Make sure your building inspector is appreciative of traditional building methods (I'm presuming that your house is old, as you're installing sash windows). For more advice on old houses, try http://www.periodproperty.co.uk/cgi-bin/discussing/forum2.pl