When I installed my wainscoting on the wall of my dining room and living room I went for 3 feet high which was recommended to me by a website I found the information on.
3 feet is high enough and gives it a great look on the walls.
If you have a higher ceiling then 9 feet high then you might want to go as high as 4 feet for the wainscoting but if the ceiling height is 9 feet or less then 3 feet is the ideal height to install wainscoting.