Combine two great wall techniques in one room. Apply a textured finish to the dado area of the wall using joint compound and a trowel. Add a basic chair rail made of 1x5's. Use the lathing strip technique, shown to the right, on the upper portion of the wall.
Paint the upper section and 1x5 chair rail the same color, and apply a timeless colorwash on the textured wall below.
(Picture from magazine.)
All that is required is enough lathing strip to cover the grooves of paneling. Lathing strips are inexpensive, sold by the foot, and is very easy to cut by hand. Attach the strips directly over the grooves of the paneling using either a product known as Liquid Nails, or use small finishing nails. (The finishing nails would allow the lathing strip to be removed easier in the future if needed.)
Once the strips have bene applied, coat with a primer such as Kilz or Binz, and paint your color of choice. Use a glaze tinted with raw or burnt umder to achive an aged effect.
The result is a backdrop for the perfect Cottage, Country or French Country setting.