Step 1 : Prepare the room
Move everything in the room toward the center and cover it carefully with plastic drop cloths. Roll up rugs or protect carpeting with canvas drop cloths (plastic is too slippery to walk on). Remove switch and outlet covers with a screwdriver. Take down any easy-to-remove fixtures or objects from the walls. And set up a good work light.
To keep the dust from migrating to other rooms, place a window or box fan in an open window in the room. Then open a window just outside the paneled room and set the fan control to exhaust. Air is drawn into the room and out the window. Alternatively, open all windows and seal off the room with tape and plastic drop cloths.
If the paneling is in or near or in the kitchen and has a greasy film on it, clean it with your favorite household cleaner.
Step 2 : Fill holes and other damaged areas
Nails located in the channels that are intended to make the paneling look like individual boards generally go unnoticed even after painting, but any that are driven into the face of the "boards" will stand out more. So use a nail set and hammer to drive these nail heads slightly below the surface. Be careful-most paneling is less than 1/4-inch thick and you don't want to drive the nail all the way through. Then apply wood filler to all nail holes and any other damaged areas with a putty knife. When the filler is hard and completely dry, sand the patched areas smooth to level them with the surrounding wood.
Step 3 : Sand the paneling
Use an electric pad sander or a random orbit sander (a more aggressive tool), and carefully sand rough areas of the paneling or any area you patched. Use 120-grit sandpaper, but if the abrasive paper seems to clog too quickly, start with 80-grit paper and then switch to 120-grit for the final sanding. Wear goggles and a dust mask when sanding, even if your sander is equipped with a dust-collecting accessory.
Step 4 : Remove all dust
Brush or vacuum the dust off the walls. Take the drop cloths outdoors to shake the dust off; and then reposition them along the walls to protect the floor from paint drips and spatters. Then wash the paneling surface with a 50/50 solution of household ammonia and water and let it dry an hour before applying the primer.
Step 5 : Apply masking tape
Use painter's masking tape to cover surfaces near the paneling that you don't want to paint. Also remove switch and receptacle cover plates and put tape on the exposed switches and receptacles to protect them.
Step 6 : Prime the surface
If there are any knots in the wood or stains that cleaning and sanding failed to remove, apply a fast-drying stain-killing primer like BIN (available in cans or spray) to prevent the stain from bleeding through the paint. When the spot-primed areas are ready for recoating, apply the primer. Use an angled sash brush to carefully cut in a 2-inch-wide border around any unmasked ceiling trim, other woodwork, and any fixtures than can't easily be removed. Then use a roller for the rest of the surface, and a brush to work the primer into the grooves. Cut in a limited area at a time so you can overlap the primer with your roller before it dries. This makes the transition between brushed-on and roller-applied primer less noticeable. Have the primer tinted to match the color of the topcoat which can help save on the amount of finish paint needed for the job.
Step 7 : Caulk unsightly cracks
Priming sometimes reveals cracks between paneling and trim around doors and windows or ceiling molding. Use acrylic latex caulk to fill these cracks after the primer has dried. Cut very little off the tip of the nozzle of the caulk tube or cartridge so the bead it produces will be about 1/8-inch wide; and smooth the caulk with a wetted finger. Allow the caulk to setup as directed on the label before applying a topcoat.
Step 8 : Apply the topcoat
Allow the primer to dry overnight or as directed on the label. Then cut in and apply the finish paint as described for the primer. In most cases two coats will be required, especially when applying a light-colored paint over dark paneling.
Step 9 : Cleanup
If you plan a second coat or are just breaking for lunch, wrap your brush and rollers in plastic food wrap to seal out the air, and you can use them later that day or the following day. When the project is complete, clean out your painting tools and equipment with water. For the brush and roller, use a brush/roller spinner and spin out all excess liquid into in old trash can. Repeat cleaning and spinning until the liquid removed is paint free.