I spent a couple weeks painting out entire basement white (even the floor) to brighten things up a couple years ago, and it's been a work in progress every since.Here's a photo of the main play area.
I took that last winter; the swing and trampoline are currently outside but will come back in this winter, along with a small slide and climber that will go on those big foam interlocking blocks (we get them at Costco).
I also have a big play table down there (3x5 . . . we cut the legs off our old dining table). Art supplies are down there too (we try to do art near the laundry sink for easy cleanup), and we're moving toys down there (we've had to give up our playroom to give DD her own room). So far, the Duplos, Lincoln Logs, and play kitchen have made their way down to join the train set and toy cars. These are not shown in the photo, but each set has it's own plastic bin.
To the right of the main play rug is a TV/VCR and couches. This is our relax and watch TV area.
Our plans include getting the foam blocks to make a play area with the slide and such I mentioned before and getting another rug to expand the current play area (also helps with warmth down there).
There are storage areas in our basement, and I block those off when friends come to play. I also "hide" storage using plain white sheets (they also hang and cover the oil tank and water heater). Helps to hide some of the visual basement clutter and keep kids away from shelves and things.
Our basement is the one area in my home in which plastic rules. All toys are stored in plastic bins, and I try to make sure that shelves are either metal or plastic (the table is wood but can be moved). If we get a heavy rain, we can get water in the basement (even with two sump pumps). We have it set up that we can easily roll up the rugs, push all the furniture to the high areas, and ensure that nothing gets wet that can't just be dried off (after three mini floods, we've learned the hard way
Also, because basements can be damp, we recently bought a dehumidifier. Best purchase ever for our basement (aside from the sump pumps). Keeps it nice and dry and clean smelling.
We spend a lot of time in the basement. I'm not as fussy with mess, and the kids can run around and be wild (there is a lot of open space not seen in the photo as I keep storage up against the walls). I would love for it to be pretty and finished (our house was built in the 50s, and it shows its age sometimes), but it works well for us. Cobwebs and dead bugs are sometimes a battle (our house is not infested, but we get normal basement crawlies down there)--I vacuum a lot if we're having company--but no one seems to really care. When kids come over, they always ask to go in the basement.
Hope my novel helps!