Wash the paneling with an all-purpose cleaner and warm water. Scrub the walls with an abrasive pad to remove grease, dirt and debris. Allow the paneling to dry.
Fill the nail holes with wood putty. Apply the putty with your finger or a putty knife. Fill gaps with latex caulk.
Lightly sand the paneling with 100 grit sandpaper. Roughening up the surface allows the primer and paint to adhere better.
Apply a primer/stain-blocker to the paneling with a roller and brush. Pour the primer in a rolling tray and place the roller on an extension pole. Dip the roller into the tray to saturate the roller with the primer. Apply the primer evenly to the paneling. Leave a 2- to 3-inch space between the top of the paneling and the ceiling and an 2- to 3-inch space between the bottom of the paneling and the baseboard. Overlap the rolling lines as you prime the paneling. Cut in the top and the bottom of the paneling with a paint brush after rolling the paneling. Allow the primer to completely dry.
Apply two coats of paint with a roller and brush. Reverse the roller and brush technique used in applying the panel. Cut in the top and bottom of the paneling with the paint brush. The roller hides the paint brush marks and provides a more solid appearance. Pour the paint into a new paint tray. Paint the paneling with the roller.