It appears to be stain because you can see some of the grain. As to the type of wood, it depends on where you are. In the Midwest I'd guess cedar.

I agree with rrah...it's stain. And my guess, as soon as I saw the picture, was also that it's cedar, which is common on the West Coast, as well. Where are you located?

The siding is very nice and in good condition, and it makes sense to maintain it like you are contemplating.