My experience is different from Mr. Spitzer. The mdf I have put up walks around all over the place. In fact, most of the sheet goods move some, whether it is paneling, mdf, masonite, tempered masonite, etc. It may have to do that I live in South Texas, and the average humidity here is somewhere along the lines of 80%, and it is not unusual for it to go higher.
I now close the joints on the beadboard in the field (middle of the walls), but shorten the inside corners by as much as I can get away with (3/16 to 1/4") and cover the inside corner with a decorative molding. This allows for a lot of expansion and contration without ruining the appearance of your installation. In the old days, I was taught that inside corner moldings were the sign of a pretty crappy carpenter, but it is pretty well accepted these days. Until I did this, my joints would often show movement and stress as the A/C was run a lot, or if the homeowner opened up the house for air, then ran the A/C or heater for a long time.
There is lots on general installation available on the net:
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pretty good. Note they stress conditioning the material to keep the humidity stable at the time of installation.
The last few of these jobs I have gotten have been installing a Georgia Pacific product that is sold at Lowe's. My clients always seem to find this stuff, and it is called something like Arctic Ice. It is a 4X8 sheet of 1/4" masonite with a baked on brilliant white finish on one side. It is pretty easy to install, as you just glue and brad in place. There are lots of moldings that will act as a receiver for the top of this product to cover the top and make a nice chair rail.
Mark the studs out so you can brad the joints to the studs in the wall. Nail holes or errant joints can be fixed with DAP, which dries to almost exactly the same color.
I buy this stuff berforehand and let it sit on edge for about 10 days inside the client's house before installation and haven't had any problems with it. To paint the chair rail to match, one of the Glidden tint bases (not sure which one) is an excellent match.
Downside: messy to work with. Brown fiber dust from the tempered stuff is powder fine, and goes everywhere.
Upside: Available at the lumber store, and is prefinished. Chair rail comes with inletted receiver to cover the tops, so if you are off 1/16 or so to stay plumb, no big deal.
Robert