Spackle will chip off and show nail rust from moisture coming through the wood. Much depends on how much movement the house undergo's. If oppisite side of walls are sheetrocked and not cracking,sheetrock would apeal to the majority. Wall paper is available to memic almost any surface emaginable. The wall as is appeals to many and is by far easiest if you like it. If you keep the boards,don't try and make them look new. Just remove most paper and cheese cloth,pull only nails that have exposed heads making them quick and easy to remove. Stiff brush and vacum dust from boards,vacum ceiling,windows and floor,then wet mop floor to prevent trash floating to stick to finish while it's wet. Choose a clear finish you can handle in gloss level you like and put it on. I'm thinking semi-gloss,oil base varnish (not polyurathane) rolled and/or brush applied. Bring in a small amount of rusty barn tin,maybe a faux rough beam or two,some window film in stained or water glass and start looking for furniture and accent items. The doors,door trim,baseboards and windows can realy make it complete. What you do with them depends on what type you have. Woo Hooo,this gonna be fun. Sorry bout that. Any of that help?

It would seem a shame to cover such interesting walls with sheetrock. Lots of work, but you could add a chair rail and wainscoting at the lower level using individual vertical boards or beadboard. This would break up what might be a too massive expanse of horizontal boards. Clear finish for the existing horizontal boards is possible. The holes may not have to be filled at all - could just add to the interesting look. Sealing with a non-water based clear primer should prevent rust bleed through. Even filling the holes with a non-water based filler, then following with an oil based spot primer to prevent any rust bleed through, followed by paint would preserve the look and, to my taste, be far superior to the blank surface provided by sheetrock.

Thanks for your help klem1 and akamaine. We are still deciding what to do. You have both given me plenty to think about! I like the idea of the chair rail, and my husband does, too. The only thing is, we have these under the wallpaper in the living room, master bedroom, and office - even on the ceiling!! It's hard to know what to do here...because I like the look of the wood but not in every single room. You know?

I guess we can drywall one or two of the rooms. I think my husband is against painting the wood. There's a lot to think about.

Wow, what kind of house is this and where? Are there studs in the walls or is this some special kind of construction?

Knotty pine is going to be rustic look and it is not for everyone. It has got to look pretty informal no matter what you embellish it with. I had a plasterer in a few months ago . He looked at my dark paneling in another room and said that he could coat it. It is probably more expensive than covering it with dry wall though.

I would certainly dry wall the ceilings

ionized - This is a brick house built in 1939 in rural west Tennessee. It's home sweet home! I do not know about special construction. Upstairs there are 3 small rooms that you can tell were built for children. It is an odd construction; it's certainly unique. We were attracted to the fact that they utilized every single space. It's incredible how they created a closet out of every empty space. :) I agree that we should definitely dry wall the ceilings. I don't think my husband would be interested in plastering. It will look "rustic" wherever the wood is exposed, that's for sure.

there will be a LOT of air leakage through the walls.
short of caulking each board, & each joint, sheetrock
is the best way to cover large portions to make wall
air tight.

air movement through insulation reduces the performance
of the insulation.

making the wall air tight will go a long way towards
making the space affordable to heat & cool,
plus it will provide comfort.

over the years I've had several clients who wanted
to leave board finishes in rooms. after blower
door testing the house & allowing them to feel
the air leakage...they sheetrocked & most
who 'loved' the look added beadboard over
the sheetrock.

best of luck.

That DOES look just like my old house in east Texas, from a similar vintage...right down to the strings hanging from the tacks!

You could always tack up more of the netting stuff and paste new wallpaper to it. I guess back then wallpaper was so popular there was no need for plaster!

I never looked for a stud in that house (because every surface was so solid--I admit we attached ceiling fans to the ceiling, bolted through to the attic! We were young and foolish but those fans never budged.) but I'm sure it had them.