it is just simple wainscot paneling. cover the wall with thin 1/8" MDF board (to smooth is out). Then add a 4"-6" flat piece of 1/2" thick MDF board around the perimeter of the wall, add your vertical pieces, then fill in with horizontal pieces. Fill/patch the seams, sand down (repeat a few times to make sure no seams are visable) caulk all the inside edges of the MDF strips, and paint.
Q
everything- CEILING!
Q