This may not be the answer you're seeking- wallpaper is a bit dated these days. There are a lot of paint finishes and faux finishes to apply and stores like H Depot can show you how to apply it.
I've seen a chocolate paint applied and then silver stencil designs or wording stencils that looked good; Italian trowel finishes, etc.
As for wallpaper, small spaces need more of a solid paper- stripes and prints don't do well.
Again, go to a DIY store and they can show you how to apply it.
I think that the current photo looks clean and that you could add some accent paint for colour- you can make it look formal by pulling out the black and white in the tile and using black around the chair rail and it would be simple; dress it up with new matching towels and accessories.

Is that a bead board surround?
Since this is a small room and not open to the rest of your space it might be fun to go big and bold with the wallpaper as these pics suggest.

Yes

http://www.bhg.com/blogs/centsational-style/tag/beadboard-wallpaper/
Try this site for more ideas for papering a small WC
You'll need to scroll down to see the large black/white design print.

I like that! Where is that wallpaper from? Thanks!,

Thank you Anne!

@scmooney You'll need to go to a store that sells wallpaper and look at the swatches to see what is available to your taste. And in this small space you can cover the ceiling making it intimate and a statement. at the same time. Have Fun!