There is no need to tear down and replace old wood panelling if the only problem with it is that it is dirty or dull. You can clean even 50-year-old wood panelling to make it look bright, shiny and new again.
Use a soap specially made for cleaning wood. Murphy's Oil Soap is the best choice for cleaning panelling that is 50-years-old or older. It smells great and will actually condition the wood. Do not use dish soap, any type of detergent or any other cleaner that is not specially formulated to clean wood.
Add 1/4 to 1/2 cup of Murphy's Oil Soap to a bucket of hot water. Swish it around with your hand to mix the soap with the water. You can wear gloves if you want, but Murphy's Oil Soap will not damage your skin.
Using a soft cloth such as an old washcloth, begin cleaning one wall, scrubbing in a circular motion. Clean a 3-by-3-foot section of the wall at a time. Work only on one wall until it is finished, then move on to the next wall. Make sure to do all of the walls in the room because this will really change the appearance of the panelling.
Wash a second time to really bring out the best of the wood panelling. Washing it once is good but washing it twice will remove more dullness and years of built-up residue. Get fresh water and add more Murphy's Oil Soap for the second round.
Use an old towel to wipe down any water runs, drips, spots, smudges and remaining moisture on the walls. Don't allow the wood to be wet for too long.
Do not wash only one small area of the panelling. A noticeably clean spot will make the rest of the panelling look grungy.