Drop ceiling and the interlocking floor tiles would be best.
I would not put in the ceiling tiles before you knew where the overhead lights were going. I would though hang all the grid work before you start building. It is a lot easier to put in the panels later then trying to install the ceiling all at once.
Also regarding the floor, I would wait to install this later after most of the main work is done. That way the raw floor would be easier to clean during the main construction.
After the main benchwork is in that way you know where the panels should go and how many you will need.
If you insulate the floor joists, you may need an addirional heat source for the basement, EDIT: I reread ealier post- basement zoned for heat (many codes this is a requirement for new construction- R-23 high density), use unfaced insulation as you don’t want a moisture barrier between 2 heated/ living spaces, don’t know what type heating, forced hot air w/ ducting or forced hot water. using a dropped ceiling separates/ isolates much of the heat radiating into the area below. I believe from previous posts that the house is somewhat newer, and you don’t have steam or old gravity hot water to deal w/ those “immovable” pipes. The exterior walls regardless of 1/2 exposed or under ground, should be at least strapped or preferably framed, insulated and drywalled (use water resistant DW geenboard at least the lower panel- if standing use it throughout) . The doors and windows, as mentioned, do need to minimize draft/ heat loss.
Dropped ceiling would be the way to go, this will stop dust from above, allow tile removal for any elec/ plumbing overhead as well as any layout or room lighting (any future overhead lighting valances or soffits can be easily attached to the joists above), You may need to box/ chase existing mechanicals or if possible relocale to gain as much height as posible. I do quite a number of basement remodels for added living space, this is not much different than a layout room.
The walls are being done, i hope they are being treated w/ a masonty sealer such as dryloc the floor should also be done at this time. Floor covering isn’t that critical at this stage, but you can weight those options as mentioned after benchwork construction. Iif your floor will remain rather dry or would only get a rare localized ‘wet" not flood, you could use VCT 12x12 tiles (use a waterproof adhesive- some of the “green” friendly products will soften w/ water)’ mrB mentions the rain runoff from gutters and
The dropped ceiling is a good idea, but heat doesn’t radiate down from above; the heated air rises. There is no difference between a floor/ceiling construction separating a heated basement form a heated floor above and similar separation between 2 above-grade stories. Insulating the basement ceiling should not be becessary.
If you live on a hill, make sure there is good drainage on the uphill side to avoid having all the water come down the hill, and collect by the basement wall. You want to divert the water around the house. If you have a humidity problem, consider installing a dehumidifier. Also, Damprid (found at Lowes) works really well for getting rid of humidity. I would suggest using flooring you would use in a bathroom or garage. There are interlocking tiles, or for a bit more work, you can get vinyl “wood” floor which comes in “planks” and overlaps eachother. It require more work because you have to cut the “planks” to fit, but will look nice. Most is waterproof and works well in high humidity environments like bathrooms. Home depot has a good selection.
In addition to the good suggestions by others here, I used a good quality one part epoxy floor paint (not the garage stuff with the color chips) as a sealant and after a few months for this to cure I covered most of my layout area with Legato carpet tiles. I have these on my main flooring upstairs, too. I did most of the area under the layout, too since I crawl around under there or if I use the scooter-seat it is easier if there’s no carpet edge.
I’m a big fan of carpet tile and the style I got you can’t see the seams at all. Visitors are surprised when I grab a tile and pull it up to reveal the sub floor (I can eliminate a floor squeak at any time!)
I’ve had Legato carpet tiles in my basement over ten years and they look as good as the day I put them down. Spilled latex paint on one once and peeled it up, took it outside and hosed it off with a garden nozzle, let it dry in the sun and ploped it right back down that evening. (I keep a few new squares for replacements) My basement is reasonably dry but does get pretty humid in July/August (NE Ohio) I use a dehumidifier on a low setting during these months.
The padding, vapor barrier and sticky pad are laminated to a sturdy carpet and the stuff wears beautifully. Other brands might be OK but I have no experience with them. I went with a suspended ceiling as well, no regrets there, either!
This remark is addressing a separation (dropped ceiling) of the mechanicals, heat piping/ forced hot air ductwork that otherwise can tend to heat an unheated basement. The use of an additional heat source is generally needed. This case has a 3rd basement zone.
With a heated space below, the insulation would act more as a sound deadening barrier to the space above (or train running noise heard through the flooring). The energy codes for 1st floor to basement insuation is for heat loss to an unheated area below. This doesn’t nec matter w/ a heat zone for the basement or the use of the space for a layout room. I know heat rises and most loss is through doors/ windows and roof. But heat will radiate to a space below as well. Insulation w/ a dropped ceiling would be optional for sound purposes in this case. See what you mean.
I too am a big fan of the interlocking puzzle like foam blocks, I’ve got a ton leftover fom a former hobby of cabinet making, so be got them all around my 12x12 so it’s really great on your knees for wiring and nice on your feet after a long day of working on the layout.
I completely remodeled my basement in Ohio, and I agree with others. I used two coats of drylok on my basement, then framed out the walls with 2 by 4 framing and left a small one inch air space behind, then installed r 19 insulation on only the exterior walls. Installed recessed can lights in the ceiling, and the cans were only about 6 bucks each from HD. A suspended ceiling works well if you have the head room, however, I installed drywall. One caution is that you do NOT insulate the ceiling because you want the heat to rise to the floors above. My flooring I used laminate wood flooring that only cost about $325.00 from HD also. My N gauge layout is being built into an L shaped bar with is 11 feet with a 6 foot L. Just barely started, but stay with this Model Railroader site and you will get lots of help. Any other help you need, send a post!!