Well Michelle, I’m not a professional painter, and I’m somewhat surprised that someone more knowledgeable than I hasn’t answered your post, but since i’ve done it, I’ll give it a shot.
Ordinarilly I would suggest drywall over the paneling, however since you want to retain the old look here is what I would do:
1) first lightly sand the entire surface with a medium sandpaper to score any glossiness for better adhesion. 2) Thoroughly clean the wall surface with a cloth dampened with thinner. 3) Paint with a (and this part is important) good quality oil based primer. I would go to a local paint store that sells to local painting contractors, and not to one of the “super” stores. 4) Lastly apply the best quality flat or satin finish wall paint that you can buy, in your choice of colors. Being an engineer. I’m naturally a cheapskate, and have been known to pinch pennies until they holler, however I have learned this lesson the hard way. The best paint to use is the best paint you can buy, and the local professionals demand the best.
Good Luck