I think it would be odd to not have it on all the walls. And your space doesn't sound too small to pull it off. You could always just apply it to the lower portion of the walls and paint above, but then you're back to peeling wallpaper. Also, consider your base molding when undertaking this change -- how will the the new panels meet the exiting trim? Will you need to pull that trim off and reapply it (or new molding) over the new panels?

I have to warn you, getting the seams not to pop away from each other is tricky, you may want the panels framed in with moulding. How about paintable beadboard wall paper? They have it at Lowes now.

I did use bead board on one full wall in my family room, painted it the same color as my other walls--it added some texture to the otherwise smooth walls. Looks fine, one barely notices it because it blends nicely.

CW78, When we remodeled our kitchen, the existing drywall was very damaged. Instead of tearing it all out and replacing it, we covered the damaged walls with 8' beadboard. The ceiling height was 10' so we cut beadboard in 2' sections, matched the grooves, and used picture molding and crown molding to cover the seams. Then, we painted it with primer and two coats of flat interior paint. We like the result.

I put bead board up on only one wall in my bathroom. It is a long but narrow room, and whoever installed the toilet wedged it so tight against the wall that you can't even get a piece of paper back there, much less any bead board. (At least I don't have to worry about the tank ever tipping over. Ha-ha.)

The seams weren't a huge issue. I just sanded down the joints so they fit as tightly as possible, nailed them down near the joint, caulked, and painted. It isn't perfect, but it doesn't appear horrible to my eye. I added some nice moldings too.

Anyway, I think it looks fine. It added some nice interest in an otherwise pretty plain room.