Pictures of the situation will help. Some wallpaper can be wallpapered over, but some can't really (at least by a novice.) Some wainscoting material is thin enough to apply actual real wood tongue and groove over. Some is not. It's always best to remove everything first and start over though. That includes the wallpaper and the wainscoting.

What tools do you own? A 4' level? A large metal square? A utility knife? A drywall blade? Measuring tape? A plumb bob? You'll need all of those for the wallpaper job, and a few other specialty tools depending on what type of paper you choose.

For wainscotting, you'll need a measuring tape, stud finder, level, square, chop saw or circular saw. Some clamps and extra boards for a straight edge. Hammer and nails and nail punch or a nail gun and air compressor. Caulk gun and tube of construction adhesive and one of paintable caulk. And all the stuff to prime and paint it when you are done.

This is a great start. I'll take some pictures tonight and post them. I own: a t-square (is that the same as a large metal square? Maybe not), a utility knife, a measuring tape, don't know what a plumb bob is so I probably don't have it, a stud finder, a level. No clamps or any kind of saw other than that old fashioned kind - definitely no power tools. Hammer and nails, yes, nail punch or gun, no. Caulk gun I think so. Paint etc no problem. The saw thing has always been the big problem for doing projects - I"m terrified of them. Maybe I should go to Home Depot and take a saw class.