Sounds like a great idea... I had no idea what "newel" posts were named but that is exactly what I was looking for and did not realize they came fabricated. I had to google the newel post and the wainscote with handrail and I found this link for anyone else interested. Here is a link that might be useful: tight staircase wainscoting handrail project

As much as i too tire of oak. if you are going stain grade with floor and newels?, id say stick with oak.....I agree w klem paint grade id stick with select pine/poplar. Oak makes a very stout and solid newel connection vs chooing a softer wood for a tighter grain and a possible odd look. IMHO.

If I was given the choice I would not carpet the stairs. I would keep the wood as is ( if it is in good shape) or stain it to match your floors. If any money is saved I would replace the metal rails with classic wood spindles.

The above picture looks lovely as the dark banister ties into the darker inlay in the hardwood landings. The basement has none of the above and it actually has a wood look tile floor. You will not get the same lovely result. I think it would look very odd. You would have wood look tile, stair tread stain and yet another stain. IMO It would read a jumble of finishes.