Basement finishing question

I wanted to add that dry wall recessed between the rafters would be really cool and give you the maximum available height. I have thought about this a lot and it would make the space just a little more special. Drop ceilings are easy and cheap but I always feel like I'm in an industrial building with dropped ceilings. 

Cool. Probably audio unfriendly.
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Drop ceiling give you easy recessed lights, diffusion and unlimited easy access.
Metal studs a non issue except for fire code.
That Indonesian submarine wasn't waterproof.
What ARE you talkin' 'bout?

Waterproofing should go on the outside and should start a few inches above the grade and extend to the footing (dimple board would be my choice). A footing drain would run the perimeter to carry the water away to daylight. This is the most expensive way but if you can do it, you won't have to worry about it again. If the system is on the interior then you are managing moisture inside a conditioned space which is not favorable but can be done with mixed results. If you go with metal studs hold the wall an inch off the masonry and use a closed cell spray foam. It will create a thermal break and minimize the potential for condensation. Spray foam will also help dampen any vibration from the metal studs. You can cover the walls with 1/2" sheetrock after that. Closed cell foam can be run thinner than open cell which has to be done twice but is a bit cheaper. This is probably the most expensive way but it works. I have no call-backs using this method except when a landscaper built the soil up too high in one spot.Drop ceilings are the most accessible for future upgrades and the panels come in a pretty wide variety of styles now but sheetrock with recessed cans looks much better and no matter what you put on the ceiling, it's going to be a reflective surface to some degree and need some kind of treatment. Good luck with it

Now is the time to put in dedicated 10 gauge 20A circuits. Cheap now, much more expensive later.

Also keep your ceiling height as high as you can. Much better acoustics.