Masonite type wall paneling

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Kristen, it sounds like you should try to remove the paneling in at least one room to determing what is under the paneling. Ideally, you will find plaster or drywall/drywall walls in great shape. Probably, you will find that the paneling was put up to hide problems of one sort or another and the paneling was glued to the walls. This will make it difficult to remove the paneling without a lot of problems. It will be difficult to do this but it will be more of a problem to keep fighting with the paneling.

Once you see what you really are facing, the probable "worst case" would be that you would want to put 1/2" drywall over the walls, prime, and then paint or paper them. You MIGHT be able to get a clue as to what is going on from the condition of the ceilings. If they are also covered with the paneling, it might be an attempt to hide fire or smoke damage.

Henry in MI