I've got a spare room (for now) in the basement. At one time it was setup for a gaming/generalized library room, and it slowly became the catch-all junk room for the house. I have a large rectangular table down there and a 4'X8' piece of tile board on top of that, that I'd marked off in 1/2" squares and used a dry erase marker on top of that, to resolve combat. The tile board hangs over the table edges maybe 4" per side which can be a bit of a problem if someone puts a lot of pressure on the edge. But like I said the room has become the junk room, and most of my gaming is done at a friends place.
So I am currently in the process of looking into using either vinyl flooring of vinyl fabric to create a battle mat from. Actually, I plan on making several mats, one for my downstairs table and one to take to my friends (his table is smaller than mine).
Once I get the room cleaned up again, I plan on adding/doing the following things to create atmosphere.
Paint the walls with a faux stone finish. Add functioning oil lamps (using scented oils) or use candles and wall mounted candle holders, to provide mood lighting (I already have a black lamp in place, it can create a bit of a creepy feeling in conjunction with several candles so you can look things up clearly as necessary).
Scatter the bookshelves and storage cabinets in several locations (with all necessary reference material closest to the GM's seat) along the walls. Including a small fridge.
Add to my collection of medieval weapons to hang along the walls (so far I've got a sword to hang up).
I have an ash-tray that is molded like skull (top comes off) to use as a center-piece on the table.
And eventually, I'd like to put in a second bathroom, my house only has one and it's upstairs.
The ideas of using a laptop or overhead projector are really nice, but unless one has the time (which I don't) to learn and use the necessary applications, they can be difficult to incorporate, not to mention potentially costly.