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Wooden floor, research what timber, depends where you are. High ceilings would make it v. hard to heat. Presumably you've checked the damp course is good so no rising damp/dry rot? W. a proper floor it will be worth more month on month forever so it wouldn't take long to pay for it if you rent it at some point.

Zman has very good instructions. Additionally, pressure treated sleepers for in-contact condition, attached to slab with powder actuated nail gun. the direction of the sleeper should be in the direction of the floor slope. this means the floor joists may need to be ripped at an angle (ie 2X8 going 7-1/4" to 6") to compensate for the concrete floor. If the home is over 15 years old, assume there is no vapor barrier between the slab and subgrade. Allow for ventilation under floor. Use R19 wall insulation between floor joists (5.5" thickness) leaving an air space below.

Lastly, the code requires crawlspace if mechanical features are located under floor. As this would raise the floor 12"+/- above the slab, consider using attic ducting for hvac or central heating. And dont glue the sheathing where plumbing may need to be accessed.

I'm with the raised floor, however you will have to use all pressure treated wood since it will be in direct contact with the concrete.

2x10's on the lower section and 2x4's on the upper section would make the floor even. Then just sheath it out with some 3/4" T&G plywood.

It's also worth checking the level, as garage slabs are usually poured with a tilt towards the door, so you may need to level the floor first with a self leveling compound.

Building a new wooden floor above the slab leaving 12 inches for utilities is the best thing. Also you wont have moisture issues like you would if you finished a floor on concrete.This may also bring all floors together better if other floors exist next to the garage space.

I've built more floors than I can remember. The best way to go is to build a raised subfloor from wood. Around the inside of the walls establish the floor joist height marking it level on the walls with a chalkline, keep in mind your subfloor and finished floor will add their respective thicknesses to the height of the floor. Establish skirt boards (floor joist boards that go around the inside of the walls) making sure to attatch them to studs and raise them just to the chalk line when securing, and try to use long screws on these boards. Lay out your floor joists on the skirt board and concrete every 16", 24", or diamonds which you can see on many tape measures starting around 19and 3/16" (very important, make your first mark at 3/4" shorter than your intended spacing to allow for the joists to break on the centers of your joists when laying subfloor) and pop chalklines on the concrete where your joists will line up. The thicker your subfloor and finished floor the wider the spacing of your joists can be. I prefer 16" regardless most of the time. Run your joists on their respective layed out marks cutting the bottoms along the length of the boards to slope with the concrete. Shim the joists if necessary with wood attatched with liquid nails. Block the joists in a manner that secures the blocks to the concrete with anchors and the joists in line with their marks on the concrete. Run any wiring if necessary through the joists. Lay your subfloor starting on the side you started your joist layout using liquid nails on the joists and fasteners through the subfloor (be sure to measure and test fit each subfloor piece before applying the liquid nails!). Then your finished floor, and trim. More complicated than pouring concrete but much nicer. Alot of steps along the way need to be well thought out. That's the basics, have fun and good luck!

they make 2X2 tongue and groove floor sheathing with plastic bumps on the bottom - you can install that directly on the floor, and there are shims you install on the bumps to keep the floor level. It's also very reasonably priced - I did my basement with them, installed a pool table, and it held very nicely. Also kept the dampness off of the ground - and any moisture contacts only plastic ball feet.

As far as the riser - you could design that into the garage - haven't you seen step ups and step downs in a house? Perhaps a built in bookcase and ventless fireplace.

We built our house on a hill, so there are lots of special designs that we did to manage the hill we were on.

what's wrong with a litle step...some type of an accent

sounds nice!