Walls and Ceilings - Painting Paneling

I own a home which was built in the 20's. In the 70's the home was "remodeled"; the ceilings were dropped and paneling was put on all of the walls. I extremely dislike the paneling and would like to change it, however I don't have the money to make any large changes right now. I've been told that painting over the paneling is an option for the time being and I'm nervous about what it will look like. If it looks terrible, then I'm stuck with it. Any suggestions?

I just bought a home that has a wonderful family room added on the back of the house 33 x 19 - all done in paneling. I too hate paneling. It makes the room dark - and it is ugly!! I have a small remodeling budget to work with - and was left with the option of painting.
A friend of mine said what they did is filled in the grooves with joint compound (very tedious), and then painted over the whole thing -which ended up looking like regular drywall.
There are so may painting techniques you can use. I will probably use textured paint to hide any imperfections. If you don't like textured paints - you could probably try painting in a few different shades.

After posting my reply I looked under paneling on this site (After all - this is the do-it-yourself site) and looked under How to Paint Over Dark Paneling - it shows step by step instructions on this subject.

Another option would be wall paper. Use drywall mud as previously recommended the prime and paper.

OR -- Install a chair rail across the desired area; paint below it with the grooves left as is; use mud and wall paper above. I've done it the second way and it both looked good and lasted well.

GOOD LUCK!