I would think you could just put carpet tiles down. If the paint is stuck to the concrete, I don't see any reason to scrape anything. My sister got tiles from carpetbargains.com they have close out specials and such and she did her whole rec room (about 12x30) for about $700 if I remember correctly. She has very nice carpet and you really really have to look for seams. A couple area rugs (cover up the peeling areas!!) would work great also, and they're easy to take up if you have water problems.