Paint it... lots easier than removing and starting over. You can fill the seams or not.... sand lightly, prime and then paint... last time I painted paneling I used oil based primer and then regular paint... worked great.

I did the same thing with 70s paneling and it was wonderful. I left the grooves, and with the paint it gave it a subtle texture without really looking like paneling. MUCH easier than removing.

We have a Craftsman house which was covered in awful paneling. Couldn't wait to rip it all out and replace with sheetrock - now you tell me that painting it would have worked! In retrospect there was just too much of it!

Remove it!

Paint it.

Depends on what climate you live in. It can easily be painted and has a country feel to it. We removed ours though (in Ontario) in our 1960's home and found little to no insulation behind it. Once insulated, the rooms were much cozier and energy efficient

Sheetrock is a more modern look, but the painted paneling is actually more durable and less expensive to accomplish. Don't bother filling the grooves.