I have 1/2" drywall on the ceiling, probably should have been 5/8" fire-rated, but it's been almost 30 years now and no problems - and 14" of blown-in insulation hasn't caused any problem either. Walls are 7/16" OSB, other than iffy re fire code, depending on your location, it's IMO one of the better ways to go for the reasons that others have stated. One thing I wish I'd done differently would have been to surface mount my receptacles - conduit is CHEAP, and easy to work with, and the added benefit of being able to easily move/add outlets is priceless as your shop layout WILL change over the years. 4x10 OSB sheets seem to be readily available here at Lowes - not sure about God's country up there, but I would think it would be too - about $8 for an 8', $10 for a 10" sheet - so no need to fool with patching in drywall. A note - OSB seems to have a glossy side, and a "porous" side - and the sheets are marked "This Side Out" - make sure that you put the glossy side out where you're going to paint. You're talking 24 sheets, if I did the math correctly, so rent an airless sprayer - the kind you stick in a 5 gal bucket and paint houses with - and cut out all the hard work - some cheap plastic taped around the floor and you can probably paint the whole place in 4 hours. The paint is definitely worth the effort as it brightens the place up, a big plus, but don't go glossy, I like semi-gloss, YMMV.
As an aside, I started attaching the OSB to the studs with a hammer and ring-shank nails which seemed to be taking forever, about halfway over I switched to 1-1/2" narrow-crown staples - the way to go, and the brand I use has some kind of heat-activated adhesive on the legs which is supposed to melt from the friction and then "glue" the legs of the staples into the wood to make them harder to pull out - seems to work as it's a bear when I've tried to take anything apart.