Lin, I painted my dark wood paneling about 5 months ago. I cleaned the walls good with just warm water, used Kilz and then painted. Use a good paint. I didn't sand mine but if you have some dents, etc, that you want to blend, you might sand. Paint a 'trial' spot. I'm glad I painted mine. My room looks so much brighter, cleaner and updated.
08/16/2010
Some paneling is made of wood, some is like a laminate, which is actually a picture of paneling glued onto a backing, something like a laminate floor. I believe some wood paneling needs to be lightly sanded before it is primed, but I don't think you can sand laminate paneling. I believe you would use Kilz or another primer. You can determine which type of paneling you have, and if you can't get the answer you need here, you can ask at Home Depot or Lowe's.