Inspect the wall for any damage. If there are lots of nicks, dings, holes or deep scratches, fill them in with spackle and a putty knife. Allow the spackle to dry, then paint the entire wall with a latex primer.
Mix joint compound or texture powder with enough water for the mixture to take on the consistency of pancake batter. If you are applying the compound by hand, make the mixture a bit thicker -- about the consistency of a very thick milkshake.
Fill a spray hopper with the mixed compound. Experiment with pressure settings and a piece of scrap wood or cardboard until the desired effect is reached. Start with 25 psi and move up until you are satisfied with the appearance of the peaks. If you plan on applying the compound with a brush or roller, skip this step.
Spray the compound onto the wall. You may use circular, horizontal or vertical motions -- it doesn't matter how you apply the compound as long as it is applied evenly and you completely cover the wall. Alternatively, dab the compound onto the wall with a crow's foot brush or roll it on with a paint roller, then slap the roller on the wall to create peaks.
Allow the compound to dry for about 20 to 30 minutes. Check the compound occasionally -- if it starts to lose its sheen and is slightly tacky to the touch, it is ready for the knock-down procedure.
Place a trowel or a knockdown knife against the wall at a 45-degree angle, then drag it down over the peaks to cut them down. Avoid smearing the peaks down -- scrape the blade against the lip of the compound bucket to remove excess compound. Repeat until you have knocked down all of the peaks on the wall, then allow the compound to dry for 24 hours.