Start with a big piece of wool, and either clip it to the chalkboard, spread it out over the rug, or order a ready-made board (ours is from www.waldorfsupplies.com). Offer your little one small puffs of felting wool in different colors:
I don't know why all the murals for babies' rooms are so "precious." I'm not into it. Besides the vintage-looking photos I posted earlier, I also love these posters from the Ashes and Snow exhibit, for either a boy's or girl's room.