Wood darkens with age - the light reacts with something in it. It's not "dirt" in the usual sense. Whitewash it?

What I would do to update old knotty pine paneling is a little different than what most people would do. I would get cream colored milk paint and wipe the boards down with milk paint making the boards an antique white. You'll have to do a few tests with the milk paint mixture to see how thick you want it and what type of effects you can get. As I was wiping down each board with the paint, I would have someone follow up behind me with another cloth and rub out each knot leaving an antiqued cream white board with the grain showing through and the knots visible. Another option would be to get a cream latex paint with latex glazing medium and do the same type of process. The difference is that the milk paint gets pushed into the grain of the wood and becomes part of the wood where the paint/glaze mixture will sit on top. I have done this with knotty alder to make a distressed antique faux barn wood look by first staining the wood with Minwax Ebony (2718) stain applied heavily and then immediately rubbed off as much as possible so that the wood was mostly grey with the knots and crevices totally black. The milk paint was then put on in two coats. The first mixture was extremely thick and used to color streak the wood, and then a thinner mixture was put on and wiped into the wood over the thicker highlights until the wood looked like grey, aged barn wood. The knots were rubbed out so that they were revealed through the finish. As the wood was going into a bathroom, it was sprayed with a dead flat varnish so that the wood looked like it was totally unfinished - but, in reality was totally sealed on all sides from moisture. In your case, since it is paneling in a room, you could leave it unfinished in the final milk paint as it really doesn't need a sealer. In a paneled room, I would go for more of an aged white look and apply the milk paint fairly thick and heavy and then gently wipe it off with the knots wiped back to reveal them,

I have yellowed knotty pine on the walls of my late 40s/early 50s beach cottage with oak flooring. Works for me (primarily because I got a great deal on the oak when I was looking to replace the skanky and probably original early 50s carpet), but I was really intrigued by the possibility of using cork or real linoleum flooring in the room. I think it would have looked great - it was just a bit pricey in my situation. Both are supposed to hold up to pet traffic very well and happen to be more or less era appropriate with a room full of knotty pine.

It would help to know what's underneath the paneling, or at least whether it's real wood paneling. If it's real wood and you just don't care for the color, I think painting it would be a better option than tearing it down. All the houses in my childhood neighborhood, built in the 1940s, started out with large fir wall panels that were about 6' wide and went floor to ceiling in every room. By the 70s (when I was growing up), most people had wall papered, or at least painted, most of their walls. Other than the seams every 6' or so, the painted panels looked like drywall as the grain wasn't prominent. When my best friend's family moved in, they nailed cheap laminate style paneling (in various shades of pickled oak) on top of the actual wood paneling!!! I remember my parents being horrified, though as a little kid I didn't understand their perspective. Now I understand.