I also agree that too much wood should not be used when stone walling but in this post, I just want to note the actual use of stone walling.
1. To stone wall, you have to construct those buildings (mostly house/dock for me) early. This prevents enemy villagers from entering your town and building IN your base so that they have easier access to your peons.
2. Another good factor that stone walling gives to your civ is that it acts like radar housing. IMO, a stone wall doesn't have to be complete to necessarily be effective. Just knowing that your enemy is within reach is enough information to know that a. he found where you are b. he has the opportunity to build within your base now c. the opportunity to either scout for his forward villager(s) or prepare for an oncoming attack.
On a little side track opinion, personally I find that mediterranean is the best map to stone wall. Finding the "choke points" on the map and house/dock them (you'll need more than 1 dock anyway to pump out your armada). Than when you get to tool, researching wall and start walling the map into sections or if you know the enemy is just outside your camp, wall in front of your house (or if you can't obviously build the wall behind your house). Basically, the stone walls give you additional time to amass a tool army or go to bronze. I completly agree w/Sting in that wasting that much wood gives you a situation where you don't have enough wood to build an armada of scout ships for defense, thus losing your fishing operation (unless your opponent is blind as a bat and starts attacking your docks instead of FBs). You'll probably also have an extremely slow tool time, which is a DEFINITE no-no in 1 on 1s and can hurt you in team games as well.
All in all, you shouldn't take stone walling to the EXTREME, but you should use it here and there to spot passing enemy villagers and realize where the enemy's forward villager(s) is/are. I hope this helped a bit, please comment away.
-Tura
"Ahhhh, your walls were a pain Tura" - my last game with Kosh had stone walling