Yes, it can be painted. I've painted paneling many times, in most cases (IMHO)it looks better than dark paneling, even if it is textured.
First thing you need to do is wash it with a strong cleaner. TSP works well. Make sure it's well rinsed to remove any residue. Allow to dry overnight. If it can be sanded, then sand with medium grit sandpaper. 120 grit works well. Remove the dust with a slightly damp sponge, and allow to dry for a couple of hours. A fan will help it dry faster.
For primer I reccomend Brunning's "Grabber Plus". A fair warning, this stuff will stick to almost anything you get it onto. Once it's dry and cured, there is almost no hope of removing it. Maximum bond is achieved in 3 days, though it can be painted over in about 2 hrs.
Use a good quality latex paint for your finish. I'm a big fan of Benjamin Moore paints. If you want a slight sheen, use Regal AquaVelvet, for flat, Wall Satin, for a durable shine, Regal AquaPearl or AquaGlo. I'd stick with flat or eggshell, myself.