I'm working on mine right now also. I guess we all have the same winter-time projects.

I found a really nice looking wallpaper at Menard's that looks like wood. It's cheap (as in inexpensive) and it looks great. Maybe you could use that on the lower half/third of your walls? Put a nice piece of chair-rail on top and paint the upper part of the wall. Or just use 2 different colors of paint and a 6"-9" wallpaper boarder dividing the 2, with a piece of chair-rail on top of that.

For my cieling I'm going to do a beam-and-panel cieling. I have an 8' cieling also, so I'm using 1/4" oak plywood (cheaper and thin) and 1x4's. It'll only hang down about 4" total from the cieling, is easy to install and relatively cheap, considering the look you'll get. But you have to take some time to lay it out right; you'll want any lights/fans/ other fixtures to center in the pockets right, or it may look a little off.

Here's an idea for inexpensive wainscott; and all the trim is just 1x4's with thicker plynth-blocks under the casing to finish everything off. No miters!



Here's one of the wallpaper I mentioned. Menard's looks alittle better (I'm re doing this).