Yes, you can paint it. The tips above are good ones. Lightly sand, clean, prime, paint. Only thing I personally disagree with is using semi-gloss. The flatter the paint the less any surface irregularities will be apparent. I would go with a quality flat or matte paint. That's just me though. No harm in semi.
Before you go to the trouble check and see if the paneling was installed over drywall or plaster. You may be in luck and you can just pull it off, patch the walls and then paint.
Also - Paneling often has a texture to it. Painting wont cover the texture. I have seen people use joint compound to fill in grooves in paneling before painting. Me, I would just remove it and only use paint as a quick stop gap.
Good luck - Post some before and after pictures if you can and let us know if you need any more help.