Traditional materials - Dry Wall, Wood Studs, Drywall ceiling, paper-backed fiberglass insulation
Traditional materials aren't designed for the basement's moist environment. Moisture added to any of these materials, or parts of them, could result in mold issues. Mold issues can lead to health issues and could force you demolish everything you just installed.
Okay, so where do I start when finishing my basement?
Think "moisture" and "mold" proof materials. Plastics, metals, insulation without paper backing - there are solutions out there. Even some Traditional building materials have been reinvented to work in a basement finishing project. Moisture/Mold resistant "dry-wall" - almost every large manufacture has a type that they sell.
Metal studs - for those who are use to using wood to stud out a wall, they take a little getting use to. The MAJOR difference is that these will never rot, cause mold, or will need replacing.
Insulation installed without paper takes away the food source for the mold. The only problem with traditional fiberglass is that it's suseptible to absorbing the moisture in the air, and will be ruined if it comes into contact with larger sources of water.
Floor Solutions -
Flooring is tricky. Normally it comes into direct contact with the basement floor which can be a moisture issue in the future. Make sure to install a plastic or inorganic subfloor first - then a finished style of flooring can be lay on top of it; protecting your carpet or laminate flooring from moisture damage.
Waterproof the basement
Plan out the floor plan of the space
Purchase moisture and mold resistant materials for the basement.
Every basement has the potential for moisture problems, leaks, and flooding - waterproofing the basement before finishing will help to protect the finished area you put in the now empty area of your basement. Protecting for the future is a good thing to do. It may be dry or have never seen water, but it can and eventually will.
Image from http://www.homebasementfinishing.com
Related Reading and Links
Read about the Top 6 Basement Mistakes that contractors and homeowners make.
See what other readers have asked in Safe'n'Dry Basement Blog's Reader Questions Section
Ask Jacob A question Directly on Pioneer Basement's Help Forums!