Prepare the room by removing furniture, knickknacks and collectibles. Cover carpets with plastic tarps to protect them from dust.
Remove baseboards and trim around doors and windows. Use a flat pry bar to gently dislodge baseboards and wooden trim, taking care not to gouge or break them. Starting in one corner of the room, number the baseboards, writing the number on the back of the boards with a marker. When it's time to replace the baseboards, you'll know exactly where each one goes. Store the baseboards and trim in a safe place away from the work area.
Remove electrical outlet covers by unscrewing and removing the screws that secure them. Store the screws and covers in a plastic bag so they don't get lost.
Insert the pry bar into a seam near a nail and begin loosening the drywall. Move along the seam to each nail and repeat the process. You'll find nails every 8 to 16 inches along the edges of the drywall panels. Once all the nails are loosened, use the pry bar to ease the panel off the wooden frames prior to installing wainscoting. Drywall panels are somewhat heavy so you may need a partner.
Remove the nails from the vertical wooden frames with the toothed end of a hammer or the pry bar. Discard the nails.
Select ceiling to floor wainscoting or install a sheet of drywall on the top half of the wall if you are installing wainscoting that runs from the baseboards to the midpoint of the wall. Use a stud finder to help you locate the studs in the wall. Hammer the nails directly into the studs to secure the wainscoting.