I am looking at the options for finishing the inside walls of my TF house. I was set to sheet rock em but am haveing second thougts. Looked at maybe using 1/4" oak plywood with something like batts nailed over the joints. Trying to keep costs down so stain grade cedar boards nailed horizontaly are out of my budget.I have milled all of my roof boards and flooring in addition to the timber frame and have just about milled as much as I care to with the alaskan mill in addtion to being out of trees! Just love that wood finish decor though and the sheetrock/texture/paint just seems out of place. suggestions? thnx bman

1/4" plywood may be alittle too thin for a covering as it would show every imperfection in the wall, you might consider 1/2" as a better choice...

Plywood thickness would not be as much of an issue if you are overlaying SIPs but if you have stud walls then 1/2" is a better choice.
In hardwood veneered plywoods the cost is more in the hardwood face than the bulk of the material so 1/2" is not really that much more.

Before you discard the use of drywall, keep its fire resistant qualities in mind.
On ceilings I like to install paneling over firetaped drywall for this reason

John's pointer on fireproofing via sheetrock is valid.
There is no rule that you must paint or paper sheetrock when installed.
Your lightweight paneling will preserve your wood look. Keep it light in color for max visible light movement.
After carefully measuring for paneling look for job lots on sale to keep costs at a minimum.
deralte

Much as I like wood panelling, drywall can sometimes be easier to repair in areas subject to dents and dings.

Pete