Wallpaper does not stick well to wood surfaces and joint compound often used to fill the paneling's grooves before papering doesn't bond well to wood either. Tearing out paneling is hard on you and destructive to the wall. Successfully wallpapering over paneling requires a different barrier between the paneling and the paper. This extra step ensures the wallpaper will last and look good as long as you want it to.
Measure the paneled wall and purchase enough 1/4 inch or 3/8 inch wall board to cover the paneling. Wall board, like paneling, comes in 4-by-8 foot sheets.
Secure the wall board to the wall with the dry wall screws and drill. Use the utility knife to cut the wall board when necessary. Make the cuts as straight as you can using the edge of the metal construction ruler as a guide. Hang the wall board with as thin a seam as possible between the boards.
Apply a generous amount of joint compound to the seams with the putty knife between the boards and press the joint tape into the compound. Go back over the taped seams with more joint compound until the tape is no longer visible and the wall appears seamless. Let the compound dry.
Sand the hardened joint compound with the mesh-like joint compound sanding strips until the wall is smooth and seamless. This gives the wallpaper a smooth surface to adhere to. Any bumps or peaks left in the hardened dry wall show through the wallpaper even if it's vinyl wallpaper, no matter how heavy the design is that is printed on it.
Dust the wall with a clean cloth to remove excess joint compound dust that could interfere with the bond between the wall and the wallpaper glue.
Hang the wallpaper according to manufacturer's instructions.