You don’t want to frame any walls too close to the furnace. You need to leave room to get around the unit for servicing. Make sure to install a large enough door to get things out if needed. Soundproofing the walls would help cut down on the noise while enjoying that “theater experience,” but don’t forget to allow some sort of ventilation if required. If you have the space, maybe you could incorporate one of the walls into a wet bar. Covering it with shelves, cabinets or a counter would be a great way to hide it. For more ideas, see our slide show.