Dogs are social animals. They live in packs in the wild. Being isolated in teh basement doesn't feel good to her, and never will.

Can you move the crate upstairs, to an area where she can see people when she is in her crate? That would be a huge first step in helping her adjust.

Here is a link which you may find helpful:
http://www.bichonfriseusa.com/index....ational%20mark

Please don't be put off by the fact that this is a bichon website. Most of the articles apply to ALL dogs, all sizes. Scroll down, watching the middle column, until you get to Puppy Info. In this section, you will see several articles specific to your question. Housetraining 101 has a section on crate training your dog. Again this applies for ANY dog, and should provide you with some ideas and suggestions.

Nurturing Basics also talks about the use of the crate, so check that one out as well.

I hope these articles give you some things to think about. Best wishes with your new dog!
Sandra