im always hesitant to paint my tank. if it turns out bad, you cant change it. and if you get sick of the color, you have to deal with it whereas if you used posterboard or felt, you can change it whenever you like
I painted the back of my 10 gallon tank and regretted it. For my 29 gallon tank I taped black fabric onto some thin plexi sheets, for I found them, and taped them onto the tank. Taping the fabric didn't work so they have to be taped onto something.
I use matte board against the wall about 4" out from the back of the tank. Then I backlight it which helps create a better sense of depth and a nice diffuse, sky-like glow. And, as has been noted, you can easily change it if you want a different color.
One of the first things I do when I get a new glass tank is paint the back with black paint, Paint zips of with a razor quite quickly. There is a bit of mess getting it all off but a few minutes usually does it. Normally the tank is empty when I paint it or take the paint off.
I have never tried mat board but it should work as long as the wetting (that is sure to happen) does not bother you. Plastic sheeting will probably be better but mat board is inexpensive and readily available.