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I would paint. Good satin finishes can be scrubbed clean or retouched with paint if they do extra-aggressive marking. You can repaint in a new color when they grow older; wallpaper requires stripping and reapplying. Also, you may find kids "help along" peeling wallpaper. If an edge starts lifting up, don't be surprised to find a section ripped off because they were curious what would happen if they pulled on it.
Go with paint. Easy to maintain, change, and clean up. You don't say how old the kids are, but if they draw on the walls, it will be easy to clean up. Wallpaper is not so easy, can be difficult to put up or expensive if you cannot do it yourself.
What would you prefer for the children's room, painting on the wall or use wallpapers?
Depending on their ages, I'd have wallpaper on the top half with a board and batten bottom half (where wainscotting would normally be installed).
Some of the 'boards' of the board and batten would be a combination of attached dry wipe boards, chalk boards, and cork boards; except where furniture would cover them. Underneath the attached 'boards' and sections covered by furniture would simply be painted with a semi-gloss or gloss paint of a light colour...perhaps alternating two or more light colours.
Wallpapers of today are much easier to remove than years ago. In one of my houses the kitchen was wallpapered. My sister said I would regret it as she had a nightmare ordeal with removing hers. So I prepared for the worst, squirted it down with water and it peeled right off in whole sheets. Took me about 30 minutes.I have seen some adorable children's rooms that are wallpapered. I probably wouldn't put the work into it as I am a perfectionist and know I probably wouldn't do a good enough job. I'd paint.
Most people go for paint ( much cheaper), but given choice and means I would prefer wallpaper. There are just adorable wallpapers for kids. Easy to install and remove. Will make the room really special.
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