Some wallpaper patterns are not that expensive. While on the other hand at $25 to $30 a gallon for GOOD paint isn't cheep either.
Depending on the type of varnish used and unknown amount of wax applied, you may have trouble getting things to stick. I think you should plan on sanding to provide a surface for the paint or paper to stick to. You can screen sand with 80 grit (that means lightly sanding, its usually not nessary to remove all of the varnish). I would try a small out of the way area and see if screen sanding will provide adequate results. Paint a small area or paper it and see how it holds up after its dry. This sound like a lot of crap, but think about finishing the entire 2 rooms then discovering a problem.
You can use putty to fill the seams & sand with a block, but once you paint they will probably be VERY noticable. I think many wallpaper patterns are much more forgiving than paint at hiding imperfections.
good luck with your project.
If it were me, I would put up paneling. Many nice patterns at $10 a sheet & typically very easy to install.