What are your floors going to be? If they are going to be wood I would not want wood on the walls

I like the planks over the rug because you can see the texture and grain

a feature wall is generally nice. I would use the solid wall for the feature... whatever he wants.

who cares about dated and trends... do what you like, you're the ones living in it.

I would Paint the wall with the window and door an accent color of his choosing.

I would keep the rest of the walls very light, let the light from the door and window to bounce around the room.

I would choose a light floor... the furniture will darken the room.

Based on that rug you show in the photo, it looks like you might like color. If you do, I would keep the walls simple, with sheetrock, and add interest to the room with color in your furnishings and art.

Since drywall isn’t on the table, is there a paneling I could purchase that would look nice? Post pics if you have them.

IMO we need a lot mor einfo as to what else is gong into this space accent walls need to be thought out before doing them . BTW hubbys are rarely good at elements of deisgn. I would drywall everything then put all the rest of the space together and then decide if an accent wall is needed

Its hard to make recommendations without knowing the floors, the function of the basement and what style you’re going for– can you give more info on what you have planned for the room?

Patricia. Agree about hubbies. Houzz has helped settled idisputes between my husband and I. My first choice would be drywall, but I need backup product ideas in case he won’t agree. If I can talk him into drywalling all walls minus the wall with the French doors, Is there a product that would mimic drywall when painted? Like premium plywood? I’m also leaning toward 7” shiplap. I can fill in the gaps later on and paint it if I don’t like it.
The space will be used kind of a rec room I’d like a bright look. White ceilings with a couple of wood faux beams(pic), vinyl wood faux floor light gray or light brown(pic) , we have leftover ledge stone (pic) that I want on the 7’Lx 2’H cement block bump out. Pulls dark, May need to lighten it up by dry brushing . Under neath the stairs will be storage(pic

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There is a compromise here. A close friend has a full lower level with a sitting area + fireplace, bedroom, bathroom and play area. When you descend the stairs, the far wall ( to your left ) in the sitting area has a wall of pine planks. They are installed on a diagonal and look fantastic. The rest of the lower floor is regular drywall.
The fireplace is rock and their furniture is soft and inviting, with a beautiful area rug in the couch area. If a wood feature WALL ( not a whole room) is done with a “quiet” wood, it becomes a textured wall that doesn’t scream at you.

I unfortunately don’t have a photo of the wall, but my inner design person thinks the light pine and the diagonal installation made that wall look extra special. Dark or gray panel planks would not achieve the same feel. I would warn you about what wood you choose, what the rest of the decor is going to be and to explain to your husband that the percentage of wood to dry wall needs to be less than he probably thinks.

“Too much of a good thing isn’t a good thing.”

RedRyder. Thank you for this info. It all helps.
If you get a pic from your friend, please post it. Would love a visual to help out.

The firts one you mentioned is the best option!

Evolution Group. You mean drywall or the rough cut white paneling pictured on rug?

Here is the room.

Red Ryder. Thank you for providing picture.

@Bev - the wall looks much lighter in person. It adds a lot of character to the space.