When I attended Kindermusik classes with my kid a few years ago, the teacher would put up on the walls the words of the music we sang. I thought what a great idea! It’s a great way to make our children’s environment rich with literature. Colourful nursery rhyme posters on the wall will be visually stimulating for our children.
It is a great help for us parents as well. Just imagine having a few spare minutes in between chores or whatever; just sing to baby some nursery rhymes while pointing to the posters. It’s like a “hit and go” activity when you don’t have time to sit down for a good reading session together.
I like this idea too because it allows you to introduce nursery rhymes or action rhymes that you may not be familiar with. Sometimes you find an interesting rhyme someone has shared on the net. Put it up on the wall so you can refer to it as you sing or recite to your children.
My 2nd son who is learning to read often uses these posters to practice his reading. He is familiar with the rhyme and so feels confident when he reads the words.
AND if your DH is like mine (who is not very good with nursery rhymes), these posters will help him get it right :)

This site called Northumberland Grid for Learning is a great resource for free printable nursery rhyme posters. They also have sequence cards for a follow up activity.

For older kids, you can fill up the wall with their own work by having them color pages of nursery rhymes. DLTK can help you with the coloring pages. First-school.ws is another good resource.

Nursery Rhyme Posters
These are some I have on my wall. My children all enjoy doing the one that goes:

“Pat your head
And rub your tummy.
Touch your toes….
And hug your mummy!”