A plain cheap drywall chase is all that is needed there. And required.

If for some reason you do not want to frame this in and cover with drywall...

then go to http://www.polecoverings.com for some ideas, or looks up column wraps.

or wrap rope around it..

Or cover it in puppies!

It is a penetration from a fire generating appliance directly through the floors of a home. That has to be covered with drywall, not combustible wood or plastic.. Whatever you do with it after you cover it with drywall is up to you.

Yes, what Sopie said -- drywall enclosure isn't a style choice, it's a function choice. If you want to put Billy shelves on either side to minimize the column effect or give more function to the space, great, but you can't just attach things to what will be a scalding hot pipe in midwinter!

There was a reason it was there to begin with so yes you need to go back to what is was

You would want to cover it because it is not attractive and because it is a hazard to little ones and non attentive big ones, and puppies. IF there was a stove there it would be different, you would see the flame and know... 'HOT' look out. This pipe is just going through the floor....hence the need to cover.

There is a difference between need and want or has to be and could.

Fred you sounded like Dr. Seuss there... lol

Rob, that would be a great option for you if you could move it. What are the barriers to moving it?

"does anyone know if i can run a smaller pipe from the furnce a longer distance (say that first floor ) and pick up the 11 inch pipe in 2nd floor up to the attic. this may help increase usable living space"

Yes, and No. Where is the water heater vent coming into this? That vent seems well over sized for most furnaces that would still be operating properly today. If the furnace is 80% efficient or better, a 4" (+double wall thickness) vent might be big enough for the furnace. If the water heater is also in the basement, then its vent would either have to be run separate, or possibly a larger vent for both. Maybe 5"+ double wall thickness. The larger vent is probably cheaper. I don't have enough technical information about what you have there to give any exact sizes.

If you don't want to find this information in the link I gave above, this may be easier to understand.

http://www.hartandcooley.com/assets/files/c3/hart-cooleytypebgasventall-sizing_guide.pdf

New energy codes may make any changes you try to make now, obsolete in the very near future. If your furnace and water heater are not new, you should research this well first. You may be forced into higher efficiency appliances that are direct vented, and only need a couple 2.5" PVC pipes to vent them.

We had a similar issue preventing us from removing a wall...based on the age of our HVAC system, best solution for us was a new direct vent furnace.

Get a licensed HVAC person in there before you touch anything. Are you saying a licensed person did that instal? You can't just add elbows or change diameters there are calculations done to have the correct draft and exhausting of the fumes.

By the way sheetrock isn't all non flammable and either are 2x4's. A licensed HVAC person will tell you what your options and codes are in your area for dealing with this. Remember you are dealing with fire and poisonous gas here.

This is where DIY takes a backseat to a serious liability issue. $500 could save someones life here, no joke!