I did something a little different in my shop. I got the 1/4" vinyl-
coated hardboard and used it as both wall covering and ceiling covering.
My primary motivation for going this route vs. drywall is the fact that
removal is easy if one ever wishes to access behind any wall, any time.
I went with the white vinyl vs. OSB for several reasons: 1. OSB out-
gasses horribly for a long time after insulation. 2. OSB sucks up primer
and paint by the bucket, 3. The white vinyl is already white, so,
although it does cost more (mine cost $14 per sheet), I did not have to
either prime or paint it, so in addition to saving on paint, I saved
tons of time.

I just finished installing all of the walls and 2/3 of the ceiling, so
I don't have a long history with the stuff to state how it will hold up,
but this is a shop, I see no significant downsides to this choice, and
the white walls made a bazillion percent difference in the looks and
lighting level. Now comes the rest of the reconfiguration project, got
the wood rack re-installed yesterday and the large dimension lumber
replaced in the rack. I am going to build compartmented storage on the
top shelf for scrap wood storage and also for some other storage (such
as extra flourescent lightbulbs).

I did not see any vinyl coated hardboard at Menards. All they had was
regular hardboard. The 1/4 stuff was around $5 per 4x8 sheet.

Does your ceiling show any sagging at all? Does the vinyl give it any
more strength? If not, and your 1/4 stuff works ok, I might just get
the regular 1/4 hardboard, paint it and put it up.

-Ryan