There are various types of wallboard that can withstand slight humidity but not necessarily prolonged exposure to moisture. I would probably use melamine coated hardboard (about 1/8" thick) for the walls and then something more durable and easy to clean for the floor. It might also help to use some scrap of whatever you use for the floor to line the first 12" or so of the walls, essentially creating a "box" on the floor. This will withstand the moisture held by the substrate as well as being more resistant to the scratching of the animal(s).
If the showerboard is cheap or not much more expensive then I'd use that for the entire project.
They will not be paintable.
For lighting, I'd go with a 4' shop light hung by chains for the ceiling. If the animal is large or has direct access to the light fixture you may have to wrap something around it to secure the bulbs. There are metal cable fasteners or various other products that will work. I've not done anything like this in some time so I can't recommend a specific product.
Recessed lighting will be expensive and not offer as much "bang for your buck" when it comes to providing substantial bright light for your animals.
You might hang a hooded light fixture with a high wattage incandescant, halogen, or ceramic heat emitter to provide basking heat in the upper portions of the cage. It will be very important the animal not have contact with this fixture as they can cause burns, especially the ceramics. Make sure your fixture is rated for more watts thant he bulb you put into it.
I built something like this for a friend and we only had a small, removable wall that came up 4' or so in the closet. If it was warm enough we could leave the closet doors open and his Iguana would rarely escape. If it did it was only into his room where he would be anyways. When he was gone he simply had to close the closet doors for security.
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first question
What would be the best thing to put on the walls?
i was thinking about using that shower baord stuff because it can deal with the humidity. but i dont bealive i can buy it in different colors. and it is to smooth to paint.
What else would be easy to use and can deal with the humidity?
Question 2
What is the best way to light this thing? it is 8 feet high so i have some room at the top for lights. i was thinking about building down about a foot to hold all of the light fixtures. how well would resessed lighting work?