Need help with finishing a wall that is not in good shape

HI , I have a small room...12x12, wood floor, plank painted brown with a brown flat mat..Walls are painted sage green , with a large border of horses splashing around in a steam... my problem is one of the walls are slanted and under the paint the plaster is very bad, so it really shows up since its the opposite wall from the entrance of the room, we use the room as an upstairs sitting room with futon , television , lazy boy chair and small round table... room is used alot and we help decorating it cheaply.... all i really want is a suggestion on what to do with the one problem wall, we thought of maybe covering it with wood but dont know what way to put the wood even , vertical or horizontal... ... any suggestions thanks dar
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