nycboyinnh,

Here's my suggestion which is a variation of what I completed this past spring in my dining room.

Select a rich burgundy type color. Very good for the appetite!!

Now, using chair rail and decorative molding (3/4 inch variety), do a wainscoating on the lower dining room walls and up the stair case. You "boxes" on the wainscoating are made with the molding you select. Everything is nailed/ glued onto your sheetrock. No difficult wood panels to deal with. Paint the entire lower wainscoat section high gloss white. This gives you color as well as the white to make the room seem larger.

This whole treatment also gives the room an elegant and formal look!

I'm assuming you have the proper tools for angle cuts - miter saw. I used a hand box miter saw for this type of molding. A power miter saw is too much for this type of job. I also like to fine cut control the hand miter box gives me for fine and detail trim work. Mine's a Stanley - the metal base one with the saw in the brace system.

And if you real get adventurous, install crown molding for the final touch!!!!

Hope this gives your creative juices something to ponder.

Enjoy the journey.

eal51 in western CT