Here in the Seattle area we use a wide verity of materials in the construction of retaining walls. The best definition of a retaining wall is a wall that holds back soil, but a retaining wall will also restrict water above and below it. If the retaining wall is 2 feet or less you can add layers of coarse gravel behind it and covered it with a filter fabric and this should drain quite well. In the Seattle area, quite a few of our retaining walls are over that height, when this is the case there are some very important and practical considerations that need to be applied in the construction of a retaining wall that is over 3 feet high. The first consideration in planning a retaining wall is to prepare the slope that you want to retain, a steep slope may need considerable grading as a part of the retaining wall installation. The key to building a sound retaining wall is in the basic construction and strength 0f the wall and its ability to release hydrostatic pressure. One of the more popular ways to build retaining walls here in Seattle is in the use of natural stone and boulders, there are many opportunities anchored a beautiful hillside with a retaining wall built out of natural stone. You might want to build your retaining wall in more than one wall, this can be done by constructing two smaller walls in steps, to take the place of a larger single wall. This is a way of terracing a steep slope with gentler and smaller walls, that give a soft and modest look to a large retaining wall. Whenever you can, look for the opportunity to add some plants in front of the walls to add a softening of it. If the retaining wall is over 4 feet high it is probably advisable to have the work done by a professional. most communities will require a building permit for any retaining wall that is over 4 feet high.