Ed,
Drylock is not for the floor. Concrete floor sealer is for that. Dricore will do the floor. It is a subfloor.
http://www.dricore.com/en/eindex.htm
Do the test. Take some 1' square pieces of clear plastic and tape them to your walls in several places on the basement walls. Look at them in a few days. This will tell you if moisture is seeping in through the walls.
Moisture is the second think to look for after height when considering a basement remodel.
The only true way to stop moisture from entering is from the outside. This can be quite expensive but solves the problem at the root cause. There are injection systems that will seal the block by pumping sealer from outside.
Bottom line is you want it to be dry so your work won't be ruined.