will it sound that bad for drums? because i dont want to spend thousands of dollars sound proofing this room...is there a cheap way of making it sound good because if it wont sound good, i guess there is no point for me to buy a bunch of studio stuff
Check out some of the music by Supercreep and Incanus that's posted in the mp3 clinic here. They use a very small recording space (a converted storage shed) and get excellent sound quality on their drum tracks.
10 x 7 is a pretty small area, as has been said, but, if you're just recording an acoustic guitar and vocal, you should be OK cuz the paneled walls and carpeted floor combination can work to your advantage to a certain degree. Applying a bit of trapping in the corners would go a long way to help you when you monitor mixes.
it should sound pretty good because its concrete and has carpets. obviously concrete does not create any vibrations or flutter. carpets will observe any unwanted echo.
What I'd do is at least buy some carpet drapes to put on the walls. What's good about carpet or drapes is you can mold your sound somewhat. If you are recording acoustic guitar like said, you don't have to worry about it as music. But if you are recording vocals, drums, or percussion, you can run into problems. You can also by diffusers and move them around. At least you don't have a big room and don't have to spend as much. If you mixing, get bass traps on the conners like said before.