That is such a simple chair rail I think it would be so easy to remove..I would remove it patch and paint the walls! You will be so glad you did!

Personally, I like chair rails, and I believe all the trim adds so much character and charm to your home. I would leave everything as it is and concentrate on choosing colors for furnishings and accessories. You may not live in the home for very long, and the next person may love the home, chair rails and all.

Nice home!! I think, Use the same color for wall and chair rails paint.

Remove it, or as wall color. It's skimpy, has no detail beneath, nobody including you will miss it. Chisel, and a bucket of drywall compound.............and a few days of patience.

Thanks a lot everyone for your inputs. I have decided to paint it to the same color as of wall :). Lets see how it turns out. If I don't like it, I'll change it back to white.

I would remove the chair rail. IMO, it will look better and be one less dust catcher.

do it as wall color. its actually hard to disguise the patch *perfectly* , repaired damage in a line is always more obvious than a random nail hole.