Yes, you want to prime the compound. You can probable even use a latex primer, but it depends on the type and condition of the paneling. You may be better off with an oil-based primer on the paneling. You may also want to lightly sand the paneling before priming. If it has a shiny finish to it, you may have problems with the paint job. Two reasons you want to prime are: (1)you will not need to use more than 1 or 2 coats of the expensive fininsh paint to cover the old color, and (2), it will cover any stains or dirt that might actually make the color and finish of the finish paint inconsistent. I would suggest lightly sanding the entire surface (you can get a sanding pad or block attached to an extension pole to make it easier). I would not recommend an electric sander. I would also suggest cleaning the entire surface with TSP (a powder that you mix with water and use with a sponge - wear gloves!) This will help remove any grease or oils from hands, etc.