1/4 peg board + 3/4 inch 1x2 + 1/2 drywall leaves you with 1 inch of screw going into the studs if you use 2 1/2 inch screws. I have always felt that the taper end of the screw does not secure much so this leaves you with less than an inch to secure it to the stubs. Give me 3 inch coarse thread...