Jonas,
I had peg board behind my bench for years. I caught a lot of flack about it, but i would do it again in a heartbeat. I hung a lot of tools on it and rearranged the layout many tims. Each time I acquired a new tool, I wanted to hang it up, so I had to rearrange things to make room for it. Peg board is perfect for this; but it's ugly, hence the flack.
In recent years, my tool acquisition slowed down considerably. I have pretty much every tool I could ever need and most of the tools I want. Consequently, the need to hang new stuff on the wall slowed way down and my hanging tool arrangement was fairly static for a while. This afforded me the opportunity to replace my pegboard with something more attractive. I had some walnut I had purchased at a good price and had made into tongue and groove paneling. It went up on the wall behind my bench in place of the peg board. I spent a lot of time studying my hanging tools and came up with a set I actually use, and some that I just like to look at. I hung those and eliminated everything else. I bought nice, stainless steel hangar hooks from Lee Valley to replace the old peg board hooks. That was two years ago and I'v only rearranged the layout once to hang a new carving axe I bought. Before, I was rearranging very couple of weeks.
Peg board was the perfect paneling for me for many years. Ugly as it is, and as annoying as those little hooks are, nothing is easier to organize and reorganize. I wouldn't advise putting up expensive paneling until your tool kit reaches some kind of equilibrium. Until then peg board is the answer.
Here's my old peg board wall:
Here's the new wood paneled wall:
