Decide how much paneling you want: the ceiling, floor-to-ceiling walls, or the traditional half-wall paneling.
Mark the actual areas with chalk to get a really good feel for how your paneling will look; alternatively, tape craft paper over the walls and ceiling to simulate your paneling. Keep in mind that paneling should not dwarf or overwhelm the room with too much wood, nor make you feel like a giant in a small room because of paneling that is too short.
Adjust your paneling height based on this guideline: From the floor, measure 32 inches
to 34 inches toward the ceiling; this is standard chair back height. Ensure that your chair backs do not hit the unpaneled part of the wall.
Draw the type of panel you intend to install onto your taped craft paper. Flat panels would only have straight lines spaced wide apart, much like tiles; bead boards have double straight lines spaced about an inch apart. Simulate raised panels by drawing smaller boxes inside each panel area. Suggest recessed panels by drawing smaller, bold boxes inside each panel area.
Keep in mind that flat panels go with traditional contemporary styles or ultramodern decor; recessed and raised panels are traditional, classic and luxurious; bead boards evoke a rustic feel. Painted panels create a different look from varnished panels, but both give a finished polish to the room. On the other hand, stained or natural finishes give a rustic ambiance.
Analyze the effect on your room. Experiment cheaply by creating craft paper panels of each style and tape over the walls all over the room. This tedious process can save you a lot of money and regret later on.