Walls and Ceilings - Ugh...wood Paneling

We started removing wall paper from our living room (aprox 30y/o house) and discovered that there is wood paneling underneath. We didn't want to paint over it, so we took off the trim from around the patio door, and it looks to be very thin, and there seems to be drywall underneath. After reading other comments here, maybe we should just paint over it??!! It's too late now to leave the wall paper, so we have to do something. ANY IDEAS??

You can either paint the paneling or remove, repair the drywall and paint it. Either way expect a good bit of work. As you already know wallpaper doesn't always remove easily and you must get all the glue removed before painting. It is also a good idea to prime with an oil base primer. If you remove the paneling you will need to patch any holes in the drywall and repair any other defects that may be present. Which ever route you take, you will likely regret it during the work but be well pleased that you did when completed. :)