Do you anticipate attaching anything to the walls like shelving or anchorage for tall furniture resting against the wall? If yes, furring strips are not substantial enough. Personally I am not a proponent of furring strips because, unless the additional 2.5" of space is critical, they may not adapt for future changes/needs.

What is the quality (rigidity) of the paneling and what c to c will be the span? Lightweight (flexible) paneling anchors better when glued to an existing wall surface. Drywall is no more difficult to hang than paneling and probably less costly.

Wine keeps best at a uniform temperature, so insulating the interior walls will be beneficial.

This should not make the build-out any more difficult. Generally using the right materials actually simplifies projects. Good luck.

If the paneling is for decorative purposes, note that the printed hardboard paneling is very sensitive to moisture changes and will show ripples in the surface in almost every installation.

Thanks for the responses. I think I'm going to frame the walls w/2x4's, add ridgid foam board insulation, and moisture resistant drywall, and finally put on the paneling.

I'm going for an old brick look. I priced out using brick veneer and it was way too expensive, hence the faux brick paneling.

Sounds like you're on the right track. Be certain to use a pressure treated 2 x 4 for the base plate.

We saw a TV program several years ago where a wine cellar was created using clay tile. The concept was very simple and unique so we adapted it for use in our basement. The tiles were very reasonable. A photo is amongst others of our basement linked from "My Page".