It's difficult to give recommendations without any pictures of the area...

A chair rail should be functional, so yes, raise the rail to the height where a chair hits it.

I would leave it where it is as it looks like the right height for chair rail. It looks like it also functions as the window sill so might be awkward to have to cut it there. If you like the look of wainscoting, I think it would suit the style of your house, but it looks fine without as well.

I agree with eastautumn. Your room is very lovely and can work either way.

Leave it as is and paint the same color both above and below the chair rail. My DR is about your size and for 32 years, the part below was painted cream and the part above was wallpapered - I had always intended to do some sort of wainscoting below the chair rail.

Finally got a bid and realized all that has to be removed to do true wainscoting and decided against it - too much disruption and too expensive. At the suggestion of a friend, I continued the same wallpaper below the chair rail (thank goodness I had extra - long discontinued!), and I can't tell you how much bigger and better my DR looks with the wall all the same. I left the chair rail - there is a reason for these - they keep a chair and other furniture that is against the wall, from rubbing on the wall. It is painted the same as all the woodwork and looks great.

Beautiful space!

The chair rail offers a nice detail to your dining room and looks to be at a purposeful height. Consider adding wainscot to it and paint it all one color -white, black, or an accent color- depending on your other wall treatment choices. The upper wall could be a textured or boldly printed wall paper or painted with an accent color.

Best of luck with your project!!

The first green is almost the exact color we're going for! But I do love the idea of having bold, floral wall paper on top and then a complimentary strong color. We're looking to increase the height of the chair rail a few inches, it seems low at 29" and we'll likely get 40" chairs since we're tall people.... Do you think increasing the chair rail especially given the location of the window isn't worth it?

Given size of room and different floor surfaces surrounding room, wainscot would make area look way to busy.

you could if you choose get same look by using a slightly darker or lighter version of wall paint below chair rail to achieve a softer look.

The trim is fine as is, and you have beautiful hardwood floors. I also love your blue and white dinnerware. I'd spend the budget on warming up the room. Add an area rug under the table, wallpaper the room, install custom window treatments, and change out the chandelier.

What style is the rest of your home, and what style are you going for? What colors do you like?

So torn on what to do!! We've always liked the look of wainscot. But the comment about paneling making the space too busy makes sense. We just moved in April. Would like to purchase large cane back chairs and a new table. The table we have now is counterheight and just terrible. It's a colonial, with very much traditional touches and an interesting layout. It's both sectioned off (like this room, study, living room and sunroom) but the kitchen/family room is open to the garden.

To complicate things... the sellers painted white over the wall paper. In very bright light you can see the seems of the stripes and there are already areas that are starting to crack. Was planning on painting myself, but the folks at Benjamin Moore recommended doing it right. One contractor said it would be too painstaking to remove. Another painter said he would caulk and take off as much wallpaper as possible and also seal the seems. $700 to paint and repair and $800 to change the chair rail and add wainscot. A lot considering I was planning on doing it all myself. But would like to do it right.

Definitely get the shell done first--I agree with Anglophilia to remove the wallpaper and do it right.

Here are some of my favorite dining rooms for inspiration:

Country Swedish:

A Country Swedish Home in Palo Alto · More Info

American Colonial with nice contrast between formal dining table/chairs and country hutch:

Austin Patterson Disston Architects · More Info

Country English (note the applied molding instead of a full wainscot):

Point Clear Classic · More Info

Formal 18th Century with stunning scenic wallpaper:

Connecticut Estate · More Info

Formal 18th Century with very highly paneled walls/neutral palette:

Architectural details add elegance and sophistication to the NJ Dining Room · More Info

18th Century dark Queen Anne furniture with light and bright wallpaper, rug and curtains.

Darien Home · More Info

Eclectic formal dining room with lots of color, pattern and metallic finish:

Hollywood Makeover · More Info

Removing painted-over wallpaper is a pain in the tuchus, but it's just tedious, not requiring any particular skill.

A source of moisture and a flat blade or two to slide under the paper is all it takes.

Find where a seam is cracking and weasel the blade under and start wiggling and gently prying between the wall and the paper. Often the stuff comes off in big chunks with no further work.

and write a thank you note to the seller: thank you for making my life miserable by sloshing paint over the paper instead of removing it.

i like the height of your rail. its supposed to cut the room in thirds, not in half. much more pleasing to the eye the way it is now.