Painting over the wood paneling, in my opinion, would be the easiest and possibly the least expensive option. I would paint over the it in an off-white creamy colour to brighten the room, and instantly give it a more modern, airy feel.

Hi Zinneck, What a great project! I think you can definitely paint over the paneling, if painted paneling is a look that you enjoy. (I do.)







If you end up not liking it painted, you can always pull it out at a later time. Painting is such a cheap fix and might be worth trying first.

Zinn... we also were faced with the dreaded paneled room ! ( along with not new rubber backed glued down carpet...after lots and lots of "elbow grease" the carpet has been replaced with glazed tile floors and we chose in one area to paint the paneling a beach theme light blue. We decided the paneling had enough texture to allow the paint to accent the wood paneling ( some paneling is super smooth which was not the case)
Adding crown molding and painting trim white helped "lighten" the room. We enjoy our beachy morning room theme. Maybe this will spark your imagination. best of luck. It can be fun.

This is more of a smooth wood paneling; does it make painting a lot more difficult? I guess the painted paneling can look good - just worried about it being painted properly and not peeling off :/

Thanks for the tips - I think I'll try painting first! I definitely LOVE crown molding...and want to install in every room (depending on cost). Fortunately it's not a huge house :o)

Whenever I see tiles put on the ceiling of an old home I immediately assume they were put there to cover cracking plaster. The same goes for paneling in rooms where it is not expected (other than dens and family rooms.)
You don't mention a track system for the tiles and the fact that they are 12x12 leads me to believe they are acoustical tiles and those are almost alway glued. Regardless of material, from what you have indicated i assume they are glued. You need to go some investigating and get a clear sense of your options and the work involved for each.
Painting paneling is rather simple, the key is in preparation. Be sure they are wiped clean. The real success is in priming. Otherwise, the tannins in the wood will leach through. I always spec Zinsser BIN shellac based primer. It is messy, wear gloves as it will not come off your hands, use a cheap throw away brush, and really protect your floors as it splatters. But it's very worth it for a fine result.
Crown molding always makes a room special. I hope you are able to do it throughout.
Good luck.

Is it definitely wood paneling? Or is a laminate, faux wood?

If so, you can still paint it, but you'll need different supplies so that it doesn't peel like you're concerned about. I am not a professional painter or anything, but I have done a couple repurposing projects with laminate furniture and had luck. I was told this is the best way to paint laminate: first use a deglosser over all of the surface. It takes a lot of elbow grease but it's the most important step! Then use a water based paint (it may take a few coats). You want to be sure to use a very nice quality brush as well as quality paint to avoid nasty looking brush strokes (since the laminate is so smooth they will show up VERY easily!) The other option for painting is to use a brush to get into the crevices and tight spots, then use a foam roller to spread the paint everywhere else to eliminate any potential brush stroke lines. Once you're happy with your paint coverage, you have to use a non-yellowing poly over top.

OR, if all of this sounds slightly overwhelming or you're not exactly comfortable picking all this stuff up from the paint department on your own, I know that Rustoleum brand has a cabinet painting kit that works for wood and laminate called "Cabinet Transformations" that apparently comes with all of these things in one kit as well as an instruction video. The reviews I've read are usually pretty great and although I've never used it myself I'm quite tempted to tackle our outdated kitchen using it! Most say it is a very time consuming project but well worth it in the end!

If it is real wood paneling, it is still pretty much just as much work-- you'll need to sand first to rough up the surface (this gives the primer and paint something to "stick" to), prime, paint, then poly. As long as you do a really good job sanding, you shouldn't have to worry about peeling.

Best of luck with your paneling!

I also think painting the panelling is the way to go....and for almost any paint job, the prep work is very important. Do your homework and take your time with it and I'm sure you will be very happy with the results.

Painting is the most inexpensive thing to do , once you are through of your other projects you can do Alterations .

I would add: based on the age of your home, the paneling quite possibly is original??? which by age- would suggest it is real wood??? you can easily identify the printed paper surfaced inexpensive paneling by scratching the surface to find cardboard.
Another point- removing the paneling to discover nothing but stud walls can be a difficult task in replacing with 1/2" drywall, as you will discover the electrical outlets and switch boxes will need to be cutout and usually require added work because the depth of the outlet boxes will not match the new wall thickness. ugh ! and....all that old base molding was cut to fit the paneling will probably have to be carefully removed and hopefully will go back exactly otherwise it will have to be re-cut.

Painting is definitely your first option.

Please keep the wood paneling and paint it; don't rip it out.

Painted paneling is still paneling. For sure the cheapest way to go. Removing it and the ceiling will be labor intensive and messy depending on if it was glued or not. I removed ours and am glad of it now. Patching the ceiling took forever. In retrospect, should just have bought new drywall. But it did give us an opportunity to add some much needed outlets.

I'm sure its most likely real wood. But even if not, Gesso is a product I've use on "photo finished" and real wood smaller projects such as furniture. Here is a link that gives an overview and price. Gesso reduces or eliminates the need to sand or use stripping solvents prior to painting and ensure a good bond.

http://shop.hobbylobby.com/products/super-value-gesso-primer-477646/

My vote would be to paint the paneling but I might opt to cut the top half off in 1 or 2 rooms and leave the bottom half painted like wainscoting. This would allow those ceilings to be removed, and plasterboard to be installed on the ceiling and top half of the room with chair molding at the meeting point. Then placing a larger, deeper molding at the top wall/ceiling height would add both charm and drama and help to blend it all together giving the effect this was "designed" this way verses covering up an older style.

My husband and I have been shopping for molding ourselves. One site we like that is very informative and sends samples is http://www.wishihadthat.com/ Please note that this IS NOT molding made from wood but we like the added benefits this product gives.

As a female I can say its easy to install drywall, tape and texture or have smooth painted walls. You might like to watch a few videos on DIY or read up on some fun textures you can use. I've posted a tag below as an example. These techniques are being use in many higher end new homes and are fun easy projects.

http://www.diynetwork.com/how-to/decorative-paint-technique-venetian-plaster/index.html