The rule of thirds. Installing a chair rail, with or without wainscoting, will divide the vertical plane — the walls — into multiple areas. If you want to make the room feel taller, place the chair rail one third of the way up from the floor.
Wainscot. While the space between the chair rail and baseboard can be finished as the rest of the wall (painted or wallpapered), many times the area is paneled. The options for the wainscot are many, including simple wood panels, beadboard, raised panels and horizontal wood paneling. And while the finish of the wainscoting can match the wood trim, it doesn't have to. For example, a painted wood baseboard and wainscot of simple, recessed panels works well with the stained wood window and door trim.