Are you happy with the results?
I'm making this decision now with a home office room I'm building in our basement.
We were undecided, then quickly decided to drywall and insulate it - good call - it's beautiful. All painted and the flooring is going in today. I thought it might take up precious space, but now I don't notice. It looks big to me.
I did both, depending on the use and the look of the room I was planning. In the rooms that had some block wall remaining: the gym, the block walls were painted to match the adjoining sheetrocked walls; the block portion of the stairway wall I faux painted to look like fieldstone or beach rock; the wine cellar room has one cinderblock wall faux painted to look like limestone. This was fun for me to do (I am an artist by profession) and made these rooms look entirely different than the rooms on the main floor.
On the other hand, choosing to install drywall gives a higher level finish IMO, and makes the basement look more like the upstairs. Our basement media room and office were drywalled and painted and they look as good or 'formal' as the rest of the house.