Here's a few pix of how I painted my back drop, still far from done. I used 1/8 Masonite, spackled the joints and primed with plain white primer. I fortunate enough to work at a hardware store with Benjamin Moore paints, so when there's a mistake qt or gallon that is of use on the layout I grab it. The sky blue color started out lighter then what I show here but I made it closer to a sunny day blue. Then I got a quart of ceiling white for the bottom half. I also grabbed a 2oz sample bottle of a light grey that Ben Moore has for trial colors (many colors that are useful for layouts, etc. that are cheap). I used the grey to add depth and shadows to the clouds. This was so easy to do even my 4yr old daughter made a convincing cloud.
Masonite up and spackled
Primed and spackle almost dry
The bottom half with ceiling white and the top a sky blue(color may vary for whatever kind of day you want.
Starting in the middle with a criss-cross pattern to blend the white and blue. Then I did long horizontal strokes to blend it from light to dark.
The first section of cloud done with leftover ceiling white and the light grey sample color. Notice the clouds at the bottom are smaller not as detailed to add to the distance perspective.
Here is another corner with more clouds. The cloud at the very bottom in the middle of the picture is the one my 4yr old daughter did. She thinks it looks like an alligator facing to the right.
I post a few more pix of the long wall with completed clouds.
You can see the complete progress of my Dad's and mine layout in the link in my signature.