Should I decorate with a dado?

I think that's what it's called. The strip of wood that goes along the wall horizontally. How far should it go up the wall? I have a mantle piece, around a foot off being half way up the wall, should it be in line with that? I've read somewhere that it makes a difference to the feeling of height in the room, as to where it is placed. Also my carpet is an Apricot pastel colour, which has an organised pattern through it of small dots blue and burgandy in a squarish fashion( sounds awful, but i'ts not) should I 'rag roll' a paint pattern above or below the dado, or will it clash with the carpet? If I do rag roll (which looks a bit like marble streaks) which colours would look good. Would a lighter colour glaze(like the apricot) look better over a darker, or visa-versa. I've looked through magazines, lot's, do you have ideas on a colour sceme. The pattern through the carpet is quite subtle. I don't like dingy or dark colours. How would a lilac look? sorry about so many questions!

Should I decorate with a dado?
Oh, I thought you ment a Daddo, as in Andrew Daddo and his brood of annoying brothers who saturated the media about 10 years ago!