On a two story house is it possible to place a window air-conditioner in a basement window and use the furnace fan to circulate the cool air? Do I need to add an intake vent to the furnace?

You would have to tap into the intake/return in order to get the ac air to be pulled in duct system,, but I don`t think it will work very well,its going to pull in ambient air from inside the basement

Just wouldn't work. Not enough btus out of a window air to cool a whole house. Why not just install window air upstairs? Or maybe a couple of them? Or better yet, have central air installed. That way you know it will work.