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Della from Oregon
A great way to replace your yard with low maintenance, drought tolerant plants is to select from plants that are native to your area. In general, native plants will be more resistant to disease, more tolerant of the conditions associated with Oregon's dry summers, and more attractive and beneficial to area wildlife. You have a wide variety of ornamental shrubs and native perennials (for both sun and shade) to select from for your area. You should be able to find a list of trees, shrubs and plants that are native to your area by contacting the horticulture department or extension agency at Oregon State University. Plants originating from the Mediterranean, central Asia or the western U.S. are usually also suitable for conditions in your climate.
Della, as a fellow Oregonian, your best bet is to phone your County Extension Service and have a chat with a Master Gardner. These people are very knowledgeable. I think what you are looking for are ground covers. Please take into consideration that some plants grow really well in your part of the state that probably wouldn't anywhere else, so you really need to talk to an expert in your area.
One thing to keep in mind when replacing lawns with groundcovers is that very few will handle compaction very well. That is, they don't like to be walked on at all. So, if you still want to use the garden to walk in etc, you may either want to switch to a low-growing grass or at least put in some
pathways to give you access to the rest of the garden.
For sunny areas:
For shaded areas:
Pachysandra terminalis (Japanese spurge)
Lilly of the Valley
You might try covering the lawn with black plastic then covering with a 2 inch layer of bark. This will keep the grass from growing and still give you something to walk on.