I did a side job for an oldbuddy.....

I furred the walls with Z furring and foam insulation, and covered it with 1/2"drywall. I put a nice knotty pine paneling from the floor up to3'. For chair rail I used 1X3" ruff cut lumber. I also used the 1X3" ruff cut lumber for the baseboard.

I stood the drywall up rather than laying it down. At each rolled edge after the drywall was finished I put another piece of ruff cut lumber (1x6") over top the taper edge from the chair rail up to the acoustic ceilings wall molding.

Don't forget to add blocking if you use hat channel or z furring to fur the wall so you have a place to attach your mounts and misc other things. The wood is much easier to work with for hanging decorations.

It is a shame to put a 1/2" hole in the drywall to use a toggle to hang a mount.