You can't go wrong with painting the walls and the paneling the same color. If this is a childs playroom select 3-4 colors and paint each stripe of panel a different color.

Love Rho's idea of painting the walls and panels the same color. The panels would also look great painted in a dark grey or charcoal shade. The dark grey gives off a more modern feel, but if you're looking for even more color you can do an earthy green. If you're feeling bold, reverse the colors by painting the panels white and the walls one of said colors.

I would definitely get that spray on texture tested for asbestos if you are going to disturb it.

Def agree with Paul.

The texture wall needs to go. If you can't remove I would put new wall board atop. You can keep the top and bottom different--just paint them complimentary colors. We had rougher DARK paneling in our basement and painted it out--what a difference and we live that it retained the wood grain paneled look besides.

IMO instead of testing for asbestos just get those textured walls covered with thin drywall and then remove the carpet and what do you have for flooring in the rest of the house?

keep wood paneling if it is real. remove texture on walls and maybe paint diff color or just change tone from the white white

Instead of testing for ASBESTOS, drill screws into it? Is that what you just wrote?

Asbestos testing was not expensive when I did it. You just send in a sample and they send you a report.

I’ve done it to every home I’ve ever renovated that is suspect. Why risk your health and your families health by failing to run a few inexpensive tests? If the test is positive, I would even give that carpet special handling when it is removed.