How about a chair rail....leaving the bottom part the wood and painting the upper walls a sunny color. That way, scuff marks wouldn't show on the bottom part.

I painted most of my fake wood paneling antique white, which is white with a little burnt umber type color in it. It really made a huge difference! The key is to clean well if needed, prime and then paint. I have had success with both BIN Shellac based primer and Kilz oil-based primer, but keep your child well away or you will have a huge mess. Wear shower caps or booties to on your feet to avoid accidentally tracking primer to the rest of the house. May take a couple of coats of paint after the primer to completely cover, plus some brush work to fill the grooves.

Once done it looks great, very cottagey, and you can just touch up anything when the child is older. Lighter colors can look good too, like butter yellow, tiffany blue, light periwinkle, etc... maybe on a wall or two. I live in a bungalow, and all the ceilings upstairs are sloped, and I painted most of the sloped areas the ceiling color, and some of the walls as well, to open up the rooms a bit, for the rooms that are painted a color. Made a huge difference--all the ceilings were wall colors. I used a satin finish, which has help up pretty well so far, but it did show brush strokes.

How about Sherwin Williams Canvas Tan for the walls and SW Polar Bear for the ceiling and a Bright White for the trim? If you wanted to go darker on the walls, SW Khaki Shade is 2 shades darker than the Canvas Tan. These colors go with just about everything and as your son grows, you can change accessories and still leave the wall color.

Thank you so much for the ideas! Especially for being so specific, because none of this comes very easily to me:)

You could always distress it, LOL

I love Arley's gray "Ral" room above!

I like Janeinfo's ideas for color (SW’s Canvas Tan), one question- do you think it would work if I painted the ceiling area a crisp white to match the trim instead of going with the SW Polar Bear? It would eliminate one of the colors and make things easier.

Yes

You have had some great suggestions from everyone, the pictures offered by Arley of the painted panelling look great, really inspiring. I like janeinfo's ideas of choosing wall colour that will last as the child grows and changing accessories. Some of the wall could be hidden with low-line book cases and storage shelving which is at an excellent height for young children to reach encourages them to put their things away. Make him a little reading nook near the book shelves with large floor pillows to lay on while he reads.

omg your room looks exactly like my bedrooms with the paneling and along with floors lol and been trying to figure out what to do with my 4 yr old daughters room and along with my 13 yr daughters room.