christine, i've done this project in my own home and loved the results. here's how i did it:
1. The paneling must be clean for the paint to adhere. i used a liquid sanding product called No Sand. This cleaned and prepped the surface for the primer. Follow the directions on the container. 2. If your paneling has the grooves in it you need to decide whether or not to fill these. I chose not to fill them (hard, and time consuming). 3. Prime with a good quality primer. I used a latex primer from zinsser and applied 2 coats. 4. Paint with a good quality paint. I used Behr interior satin latex and applied 2 coats.
A word of caution; wait until the paint has cured before you hang anything on the walls. You may have paint transfer if you don't.