Depends what the purpose of the room will be? Are you going to be using it as a den, playroom or other - then you might want different materials than if you want to prettify storage.... let us know... thanks

It used to be living space, but we had a major flood and lost everything. So now we are down to the studs. We want it to look "presentable" for re-sale someday, but it will be mostly storage and laundry. Not looking for fancy, just clean and neat.

ifran - are the studs actually in place or is it just the cement blocks? Sorry to hear about your flood, could this be a regular event or was it one-off? If it is just the blocks then I think just to paint them - neat and clean as you say - and let the next owner put their stamp on the area with whatever they need the space for. Space for potential use will sell. Just ensure there is no dankness or odour, that is so offputting.

Drywall is the most economical covering....after the "wood" paneling that is getting torn out or covered over every day. Labor and material for drywall installation is a bit cheaper...it is the finishing that makes it more costly than hard board paneling. If you simply fire tape, that is, bed and tape and scrape all joints and screw heads, it's about even. Drywall would still be unfinished but it would be a better starting point for eventual resale. People will see the space as ready to finish as opposed to ready to tear apart.

Thanks so much!
Studs are already there. The water problem is luckily under control now. It shouldn't be a recurring problem.
I wasn't sure whether or not drywall or paneling was better. Thanks for the advice!