A wood paneled room, or even an accent wall, can have an exciting effect on the ambiance of a room. If you plan to install paneling, don't plan on it replacing drywall. Gypsum, which sheetrock is made out of, is fire resistant, while wood paneling isn't. Most fire codes require sheetrock behind any paneling. You have several different choices when you select paneling. Veneered plywood has a thin layer of real wood attached to plywood. Simulated woodgrain panels cost considerably less, because woodgrain-printed vinyl replaces the wood veneer. Even less expensive is a type that combines the simulated wood finish with fiberboard. For installation, you can use adhesive, nails, or a combination of the two. Before you start, get the paneling accustomed to the temperature and humidity of the room where it will be installed. Stack it in the room with scrap lumber separating each panel for at least 48 hours. You can use this time to plan exactly where each panel will go. If you're using nails, each joint has to fall where a stud is located behind the wall. Starting at an inside corner, find a stud less than 48 inches from the corner. Use a vertical level to mark a line on the wall. Repeat the process until you have vertical lines every 48 inches along the wall or around the room. If necessary, trim the panels to be half an inch less than the height of the wall. Use a circular saw, cutting from the back of the panel. Apply the adhesive according to the manufacturer's instructions, making large, wavy lines where the center of the panel will be, and closer wavy beads along the edges. Place quarter-inch shims on the floor and rest the panel on these while you make sure that the panel is plumb. Carefully press it into position. Then double-check to be certain it's perfectly straight. Once you're satisfied that it's in position, pound it with your fist to set it into the adhesive. Repeat the process around the room. Let the panels barely touch, rather than fitting them tightly together. Otherwise, they could buckle if they expand later. When all the panels are in place, finish the job by installing the trim. Paneling manufacturers generally provide matching moldings for trimming the floor, corners, and ceiling.