Please forgive me for resurrecting an old thread. I'm new to this forum and, as I was reading through various threads, I came across this one that was generally disparaging of peg board. I could not resist putting in my 2 cents worth with maybe a hint or two.
I built my shop as an extension of my car port about 10-12 years ago. Of course, my budget was tight and I came across some used 1/4" peg board that was in good condition and I decided that it would be good functional wall covering (please grit your teeth as you read on). I had enough to completely cover three walls. I mounted it with washer head screws to each stud for strength and stiffness and to make it (relatively) easily removable (continue gritting). Then I painted it white. I believe that I have a pretty good aesthetic sesns, but after all this is a shop and practicality has to take precedence. The slat system is so much better looking, but when cost and flexibility are the deciding factors, peg board can't be beat. I guess my second choice would be plain plywood. I do also have some cabinetry hung with french cleats.
The main thing that makes the peg board successful in my shop is the mounting system I have for hooks. I have a mix of small and large hooks of various shapes and sizes; some purchased in variety packs. Some are made with little nubs and extensions to make them fit more snugly, some not. It doesn't matter. I use left over #12 or #14 electrical wire to bend ties that hold each hook securely to the peg board. It only takes a minute to bend and attach and, when done, I can "yank" the tool off the hook and "toss" it back on and the hook stays in place without wobbling back and forth. If I want to move the hook, I just cut the tie and bend a new one for the new location. Of course, there are a variety of commercial ties. The ones I've tried I've found to be too expensive (for what they are) or ineffective.
The peg board in my shop is not beautiful (but who cares; it's a shop), but it has proven to be functional, serviceable, convenient, and economical.