Well, for nearly two years in our current house, the east wall of our kitchen looked pretty much like this (substitute chipping paint for the spackle).
I first saw a pegboard pot rack on Apartment Therapy's Cooking Blog, The Kitchn. I immediately thought it would be a fabulous way to use an otherwise useless space in our own kitchen.
And it was so simple to create! We bought a pre-cut chunk of pegboard from Menards. I primed and painted it to match the walls. (I think accent colors can be cute, but I didn't want too much going on in our little kitchen.) Kyle mounted three half-inch-thick wood slats to the wall and then screwed the pegboard to the slats.
Easy and cheap!
I love how it looks and, more importantly, how it works. Everything is easy to see and easy to reach. No more crouching down and digging around to find the right size pan.
My new tiny kitchen motto: When it doubt, hang it on the wall!
So far, it's working great for me.