Clean the basement thoroughly. If it is damp, plug in a dehumidifier to get rid of excess moisture.
Cover the floors with carpet or a large area rug with thick, comfortable plush for the kids to play on or stretch out on to watch television. Look for cheerful colors like yellow and green to brighten the room.
Paint the walls a muted, light color such as cream, buttery yellow or a pale brown. Hang artwork that reflects interests and tastes of your family.
Install a dimmer on overhead recessed ceiling lights so you can easily control the lighting during TV watching. Place one or two lamps near spaces that will contain crafts or games.
Bring in a comfortable, large couch with durable upholstery. Add a few toss pillows in bright fabrics to add punches of color to the room. Ottomans are comfortable for propping up feet or for extra seating, and some styles open to provide storage.
Install a big-screen TV on the wall, mounted where it will be easily seen from the sitting area. Place speakers around the room for a theater feel, with two on either side of the TV, one on each side wall and one at the back of the room.
Set up cabinets to store movies, video games and equipment, music systems and other electronic equipment. Cabinets with doors allow you to hide clutter.
Provide a table and chairs for younger kids to sit at and do artwork, games or crafts. Place plastic bins and storage drawers nearby to hold toys, art supplies and games.
Hang a dartboard on a wall that has at least 10 feet of clear space in front of it. Include a pool table or foosball table if the room is large enough and family members would play the games; they allow an alternative when kids take a break from playing video games.
Provide one or two beanbag chairs and large floor cushions for extra seating when friends visit. Look for bold colors to spark up the room.
Place baskets near the couch for holding remote controls, books, coasters and magazines. Keep accessories in the room to a minimum to reduce clutter, but consider just a few decorative elements such as a vase, sculpture or silk plants.
Plug in a small refrigerator to store drinks and snacks. Keep plates, cups, napkins and spoons or forks handy in a cabinet.