We started off getting rid of the super un-pretty beige linoleum! Added some pretty gray tiles and painting the walls a greige (Behr Elephant Skin). Then purchased two horizontal soft-closing white cabinets for storage (Ikea Akurum), a pretty not-your-typical-utility-lamp (Allen + Roth from Lowe's) and bold red washer and dryer (LOVE that pop of color). Oh, and to cover up the furnace/heater/pipes/necessary-house-stuff elements, I purchased three panel curtains in white (Ikea Anno Inez), to coordinate with the cabinets and closed off that entire section. I think it looks fab, but I'm partial :)
UPDATE: I also added a drying rack on the wall that can be folded down when not in use!