Pegboard in a nursery or child's room is such a perfect space-saving idea. Properly installed, pegboard can support everything from artwork to storage containers, plus it allows you a huge degree of flexibility (aka the freedom to keep changing your mind about how you want to display things). As an added bonus, it looks super cool. The slightly industrial look is a great foil to the rampant tweeness that can sometimes overwhelm kids' spaces.
Now that pegboard has entered the design arena, it's possible to buy decorative pegboard, such as the magnetic boards pictured above from PB Kids' Stanton Collection. Or you can go old school with pegboard panels that you can pick up at a hardware store. We also spotted this set, which comes complete with assorted hooks, clips, and plastic bins, at Overstock.
For mounting instructions, check out this post at Apartment Therapy: San Francisco.