Here's a photo to clarify the question. Leave the wallpaper and add paintable wallpaper over, or peel off the as much of the vinyl layer as I can, then add paintable wallpaper over?

Two bad choices. Just pick one. And don't ever turn the lights on.

Agree with ci. If these are your only bad choices, I'd seriously look into sheet rock over top of the wood paneling. Whatever your reason for not wanting to take down the paneling, it will solve all your problems and give you something to be proud of.

I can't take down the paneling. Renovating with sheet rock isn't in the budget just yet. The wall is made of paneling nailed directly to the studs, no drywall under.

Until then, I just need a way to not have a room filled with stars and stripes. Doesn't need to be perfect, just tolerable.

I don't think I can get the paper wallpaper backing/wallpaper paste to release from the paper coating of the faux wood paneling. They've essentially fused to become one. If I try to remove all of the paper, and clean it, I'm certain I will end up with badly damaged paneling. I really think the only options are paper over paper, or paper over paste. I just need help understanding which is best of these two options.

Take some warm water and spray one section. Usually that absorbs into the backing paper and it will all come right off. Give it a try, because, that is the best way to go. By that I mean spray the backing paper itself, not the top layer. The top layer looks like it is peeling right off the backing layer.

You can use some 3D brick panels.. They are around $60 CAD per 4x8 sheet (roughly). A lot of our clients purchase these to decorate their homes/offices and whitewash them (paint white). These can be cut and glued to the wall and then painted any colour. They are often used by movie production companies but are also great for decorating walls in the home.