What's often called wood paneling isn't wood at all, but faux-grained sheets with fake seams between the "boards." Homeowners have found ways to disguise it, using joint compound, primer and paint. Learn how to disguise your wood paneling for a fraction of the cost of replacing your paneling with Sheetrock.
Carefully take the molding off the wood paneling wall, using a hammer and pry bar.
Using a paint roller, cover the wood paneling with painting primer. Get the primer into the grooves of the paneling with a paintbrush. Let the primer dry.
Stick fiberglass mesh tape over the paneling's grooves and seams. The mesh tape should stick easily.
Apply drywall compound to the fiberglass mesh tape. Cover the tape completely. Let the compound dry completely.
Lightly sand the drywall compound with fine-grit sandpaper. Vacuum the wall once you have finished sanding. You may need to apply more compound to smooth it out. If you apply more, sand it again to make sure the wall is smooth.
Cover the wall with more primer, and let it dry.
Roll or brush on a layer of latex paint and allow it to dry to the touch. Apply a second coat of paint and let it dry for 24 hours before hanging anything on the wall.
Reattach the wood molding and trim.