So we painted and framed the wall and decided to make wooden tiles. Wood gives a warm feeling as long as it not overwhelming.
We bought two 4x4 pine posts from the Home Depot and started chopping them into 7-8 mm tiles.
Using a chop saw, Brian made about 500 of them the house smelt like a lumberyard - love it! Then we sanded the edges. Any thinner tiles started to warp.I used a hot glue gun to put the tiles in place. they didn't always match up but somehow the pattern always stayed straight. It was a miracle .
The wooden tile gives the room such warmth now. I's been up for three days but I don't know how the raw wood will behave in the long run (expanding etc.) So it will be our little experiment.
UPDATE 3/3/10! Some tiles fell off, Elmers Glue is better. Thin ones warp a bit but nothing major.