The Collaborative International Dictionary of English v.0.48:

Dado \Da"do\, n.; pl. Dadoes. [It. dado die, cube, pedestal;
   of the same origin as E. die, n. See Die, n.] (Arch.)
   (a) That part of a pedestal included between the base and the
       cornice (or surbase); the die. See Illust. of Column.
       Hence:
   (b) In any wall, that part of the basement included between
       the base and the base course. See Base course, under
       Base.
   (c) In interior decoration, the lower part of the wall of an
       apartment when adorned with moldings, or otherwise
       specially decorated. Daedal

WordNet (r) 3.0 (2006):

dado
    n 1: panel forming the lower part of an interior wall when it is
         finished differently from the rest of the wall [syn:
         wainscot, dado]
    2: the section of a pedestal between the base and the surbase
    3: a rectangular groove cut into a board so that another piece
       can fit into it
    v 1: provide with a dado; "The owners wanted to dado their
         dining room"
    2: cut a dado into or fit into a dado

Moby Thesaurus II by Grady Ward, 1.0:

99 Moby Thesaurus words for "dado":
   baluster, balustrade, banister, base, baseboard, basement, bezel,
   canal, canalize, carve, caryatid, chamfer, channel, chase, chassis,
   chink, chisel, colonnade, column, corrugate, corrugation, crack,
   cranny, crimp, cut, die, dike, ditch, engrave, engraving, flute,
   fluting, foot, footing, footstalk, foundation, frame, furrow, gash,
   goffer, gouge, groove, gully, incise, incision, jack, keel,
   microgroove, mopboard, nadir, newel-post, pedestal, pedicel,
   peduncle, pier, pilaster, pile, piling, pillar, pleat, plinth,
   plow, pole, post, queen-post, rabbet, rifle, rifling, ruck, rut,
   score, scratch, shaft, shoemold, slit, socle, sole, staff, stalk,
   stanchion, stand, standard, stem, streak, stria, striate,
   striation, subbase, sulcation, sulcus, surbase, toe, trench,
   trough, trunk, upright, wainscot, well-worn groove, wrinkle