You can remove all trim(s), and lightly sand the gloss off of the paneling. Then treat it the same as drywall finishing using mesh tape on the seams and perforated paper tape on inside corners and where the wall meets the ceiling. or just caulk along the cieling if not finishing the cieling.Two coat the tape joints as well as filling the grooves, then for a third coat, skim coat the entire surface.For the third coat, i would use topping compound , as it finishes nicer with less shrinkage. Then texture,(if wanted), prime and paint.
Before doing anything, you should inspect the paneling for any water stains to see if you might have moisture issues,and if that's the case, deal with that first, as you will eventually end up tearing out the new work you just accomplished.If you do have water leakage problems, find out the correct method for dealing with it in your area.

That's a good point by sierraeast. I found moisture problems and mold behind my panelling and had to fix the problem and replace the sodden fiberglass with styrofoam in the area. The rot was just starting at the backs and bottoms of some of the panels.

Ted

Wood panneling is not allowed in many places without a drywall backer.
The thin wood stuff burns very quickly without backing.