There are plenty of specialize types of wallpaper available, including thicker commercial grade designs that can protect wall surfaces in a bathroom used by children and semi-impervious varieties that are similar to envelopes used by FedEx that neither stretch nor tear (within reason).
Although bathrooms with frequently used showers may need to be covered in a vinyl wallpaper for durability, powder rooms and half baths can feature a more delicate, high impact wallpaper such as silk or grass cloth.
Tip: Buy an extra roll. If you opt for wallpaper, buy an extra roll and tuck it away. In the event that a wall is damaged, having the paper on hand means you wont have to try and track down the old pattern that may not be available any longer.