I would like to finish my basement floor. The basement does not have
any problems with water or leaking.

Here's my problem. House built in 1939. Basement is semi-finished with
floor covered with cracking/peeling vinyl asbestos tiles. There are
several areas of the concrete that bulge upward, approximately 1/2 inch
higher than the rest of the floor, making the floor uneven. I have
approximately 7 feet of clearance from the floor to the ceiling. I have
a few ideas. Does anyone have any suggestions?

1. Forget about the vinyl asbestos tile and install a subfloor (like
the dricore interlocking system) using their spacers to make up the
difference in floor heights. Or is 1/2 inch too much to make up with
spacers?
2. Scrape up the vinyl asbestos tile, use a leveling compound to level
the floor (anyone have a suggestion about what kind of company does
this kind of leveling?), then install sleepers and a subfloor.
3. Scrape up the vinyl asbestos tile and hack out the areas of
raised/heaved concrete with a sledge hammer and chisel, then fill in
these areas with a concrete patching compound.

By the way, does anyone know if vinyl asbestos tiles are dangerous to
deal with. I've read that because the asbestos is in the vinyl it's not
dangerous.
Any help would be appreciated. Thanks