The panelling is only trying to take over 2 rooms but the house is fairly dark even in the rooms without dark brown walls. The panelling had to go. But, without a budget for gutting rooms and putting up new walls, we decided to go with painting. Which was actually far easier and had a more pleasant result than I'd expected!
All we had to do was to wash the walls (we used Murphy's but I'm sure there are all sorts of things they could have been washed with)
Prime with Smart Prime, latex acryllic primer
and paint our chosen color which, due to the darkness, was "Pearl". Here I can't help but be reminded, every time I mention the color, of Mrs. Blandings and her request for "not a cold, antiseptic, hospital white. A little warmer, but still, not to suggest any other color but white."
In the end, I surprised myself by actually liking the painted panelling. As in it is a look that I might have chosen to have, rather than just dealing with it out of necessity. Patrick agrees.
These photos are a few weeks old -- this room no longer has blue carpeting and it has some furniture in it. I promise to take some new (and better) photos soon to post here.