Prime the ceiling. A high quality primer will help your paint adhere properly. If you are using an oil based primer, turn on a fan while you work to help circulate air since some basements may not have good ventilation.
Paint the ceiling a light color. White or ivory will help give the impression that the ceiling is taller than it is. A light color will also reflect more light in the room.
Paint the walls to match. A light color on the walls will also give the impression of more space. If the walls are concrete, prime them first, and then use an oil-based paint intended for masonry.
Install a border or molding at the joint between the ceiling and the wall. This will help draw the eye upward. Either one should be light in color and subtle -- no busy wallpaper prints are needed for this application. If you will be installing molding over masonry, use masonry screws and a drill with a masonry bit.
Light the area. Install ceiling lights or wall sconces to bring more light into the space. This in turn will reflect off the light colored walls and ceilings and give the impression that the space is wider and taller than it is.