I chose to use painted OSB on my basement shop walls. It just seemed more appropriate for me given how often I bump the walls and my desire to be able to screw tool holders anywhere I wanted. Then I had my house appraised. Evidently, a "finished" basement room requires drywall or paneling (and some kind of flooring). So, should I ever want to sell, I would have been better off hanging drywall since I could move the tools out, throw down carpet or laminate and my shop space would be considered a finished living area. I read lots of threads on the topic and don't recall this aspect being disucssed so I thought I'd share my what I learned with you all. I suppose if it really mattered to me I could put 1/4 drywall on top of my OSB.