First, there is no right or wrong answer. Second, the opinions will be as different as the agents giving them. My answer is that it depends. If people aren't buying your house because of the flooring in your lower level and you are consistently receiving that as feedback, get the work done. It is too hard for buyers to envision what it could be and most will be concerned with whether or not what you are offering as an allowance will enough to get them what they want - even if it is.
If the flooring is okay, it isn't being mentioned in the feedback, and you are just doing it because you don't know what else to do but feel you need to do something. Reduce your price by the amount that you were going to offer as an allowance or spend on the floor. In the end it is nice to have a perfect house but if what is there will do for now, it is better to have a perfectly (or at least that much better) priced house.
Patrick Howard- Edina Realty
Good luck with your renovations!