It seems like it would really warm up the space which would be my biggest worry as far as comfort goes in a basement. Just did a photo search for basement fireplaces and found these. http://www.houzz.com/photos/basement/fireplace

Why not try the ethanol fireplaces/gel fuel fireplaces. That way you get real flame.

Hey, John! We think it's a great idea. They're emission-free, can produce significant heat and many models can be moved around if you decide to reconfigure your basement space. Some companies are doing wild things with electric fireplaces ( http://www.atgstores.com/fireplaces_1134.html?option3=Fireplace%20Heatsource=169576~Electric&linkloc=catheader&gpid=803697), so we thought we'd share some images of available styles. We hope these help give you ideas. Good luck!