Many people use Masonite but I have been using fiberglass reinforced plastic wall paneling. It is bumpy on the finished side and smooth on the back side so I use it back side out. This paneling had worked very well on my old layout for 11 years as mentioned in the December 2013 post Lessons learned from the old layout. For me the advantages of this type of paneling are the thinness and the greater flexibility when rounding a corner.
Attachment is done with 1 inch nails on the top and bottom at each wall stud. I tried using finishing nails but the heads of the nails tended to break through the panels so I now use 1 inch nails with a flat head.
At the seams I splice the sides of the panels facing the wall with .020 styrene.
The corners on this layout will be curved and the first one is going to be behind the dry creek scene on the Wesso section.
This photo shows that area and how I have placed the seam between two sections of panel to one side. The first two panels were from the old layout and had been painted blue. A notch has been cut out right at the corner so the panel could go over the bench work.
The nails and seams are then smoothed out with Spackle and then a coat of primer will put on to seal everything. With at least some of the panels now ready I have ordered 24 ft of photo backdrop.