One other issue I wanted to point out to you is to consider the possible effect of flooding that might occur if your laundry room is on the main floor and the washer should break down. Though it should not happen, we have had a flood from our laundry room three separate times from three separate issues, 2 which caused substantial damage to the flooring. Our laundry is in the basement and we have engineered laminate flooring. The first flood caused water to go under the floor and we had to tear it up. We thought the problem was rectified, so we put the same floor down again. One year late we had another flood from the washing machine which again went under the flooring and we had to tear the flooring up again to dry out. Needless to say, that type of flooring did not go back down again. While we were deciding what type of flooring to put in the basement, the pump on the washer went and caused some more flooding, except not so bad this time. So even though lots of people never have any issues with possible flooding from the washer, there is always a slight possibility of it happening and it might be something to consider when thinking of where to place your laundry room. Good luck with whatever you decide.

CJ You need to vent the dryer to outside. The problem is not heat, it is moisture. You need a plumber to come and give you an estimate, the drain in the bathroom might be able to be used, but you have to have a certain size for the washer and it has to be vented. If the bathroom sink is on the same wall that the washer will go, it is likely that it can be used. The drain for the pan is an emergency drain and code in your area may not require that it be connected to the drain. It has the purpose of draining in the rare occasion that your washer leaks or overflows. This prevents damage to the structure. Again, you need the advice of someone who is knowledgeable about the local codes. If you are rebuilding the room, pay attention to the floor and how supported it is. A springy floor is going to be problems for a washer because they all depend on placement on the floor for part of the damping of the machine. Front Loading machines use a shock absorber type of damping and the could be problematic with old floors and joists. Top loading washers normally use some form of floating damping system that may have quite a bit of vibration. Anything that can be done to reduce vibration and spongy floors during the build will serve you well.

In our first house we had one level, and W/D near the garage entry. Next and current house is 2-story with laundry room on 2nd floor, and I love it. But, it just depends on how you live and how you actually "do" your laundry. For us, by that time, our girls were school-aged. So I was not tending a baby and folding lots of little baby things. The upstairs is just great since the laundry is in the middle of the hall, with baths and BR's on either end, so all linens and clothes just go there. You can dash and get something from the dryer to put on, or a warm towel. I don't think it's as simple as "where you spend your time" with the exception of watching small children, but maybe more about how you attack the clean clothes, and whether you have bedrooms on 2 floors or all upstairs. Or maybe as pointed out, if you do 10 loads of laundry in one day, you then are having a real laundry project, like a cooking project, and tending it most of the day. So those habits and preferences will affect what works best. I spread my laundry loads throughout the week, and so tending 1 or 2 loads in a given evening overlaps with other trips up or down stairs to do other things. With the upstairs laundry, I bring a hamper to my room and fold clothes and towels and put them directly in the closets/drawers. I may use the bed to make piles of folded stuff. I listen to radio or talk with my husband or just, you know, think deep thoughts. (Girls (esp in past years) take hampers to room and who knows what they do then? Not my problem). There is room in the laundry to fold there, so I might do some towels there, but otherwise I don't, since I would then have to just stack stuff in hamper and bring back and dig out again. So, I prefer my current system to an off-the kitchen system in which I'd haul stuff upstairs or fold stuff on the sofa. I don't have a mudroom and wish I did. I think that definitely influences laundry gameplans, since then you have other advantages of the mudroom and how your organize the flow of clothes and stuff. If one or more family members have to deal with dirty work clothes/uniforms, or maybe just active kids and sports stuff, that can be an advantage if you are organizing the clothes and shoes off upon entry. I guess you have to put on a robe or something to come trouping through the living room after stripping? But for those who have less frequent "toxic" clothes, you could just have a drop-off hamper at the entry point. I think it's less universal than kitchen design, which while still very personal, has the somewhat universal issues of work triangles and door-openings and things for the basic layout, and then moves on to more preference-based issues for how and where you eat, do homework, watch TV.

my guess is you have a balloon wall.......something that was in an early 1900 home we owned. Ours had walls of 1x12" boards, edge to edge, with the wiring between boards. But, even with that, we still had drywall. My guess is he doesn't want to deal with it or doesn't know how to tape/mud. Paneling isn't cheap, as you've probably discovered, but it's something he can install. Many a home has painted paneling and it can look very nice. I recently saw a lounging room in a new equestrian center done in paneling and they installed a chair-rail and painted the two areas different colors. It was done in blue and burgundy and looked pretty classy! The site below shows the use of chair rail on painted paneling....... Here is a link that might be useful: paneling