Carol, the problem with answering your question is that there are so many different kinds of paneling made in so many different ways that you can't come up with a "one answer fits all" response. A lot of paneling looks like wood but isn't. It is a picture of wood. Because of the camoflage effect of the colors, the joints and nial holes that you have to look closely to see now will be magnified many times over if you paint it a light color.
You can try a good sanding with 100 grit paper and be sure you get in all the corners, followed by an oil based primer like Kilz, followed by paint. Latex is fine for this and be sure you use the best quality you can find. But you still may not be satisfied with the results in a couple of years. I suggest you look at just replacing the paneling. There are many different kinds with great colors and designs available.