Originally Posted by PaperPrincess

I would also go with the peg board. It might not be the most attractive thing, but as other posters mentioned, you can dress it up with paint and moldings. The benefit of the pegboard is that you are not locked into a specific configuration. You can move stuff around as needed. The only thing to remember when you install it is it can't go right up against the wall. You need to have little spacers so the hooks have somewhere to go.