A fun (and cheap) way to dress up your walls is to treat them with a carpentry finish.
There are a lot of carpentry wall treatment options including the following:
Tongue and Groove
Board and Battan (pictured)
And there are a variety of ways you can use these treatments in your home. One of the most common ways to use this treatment is to create a wainscot around the room, which means that the carpentry is applied to the walls usually around eye sight height (roughly 4 ½ -5 ½ feet) from the floor.