Just wanted to follow up on what we have done in case this is of benefit to anyone else with a similar query: The drywall guy says only mudding over the panelling will not give great results, so we do need the drywall. He recommends 1/2 inch drywall as 1/4 may leave an uneven surface. His costs were similar with or without the panelling (around $5500 to sheetrock the whole house -- 2600 sq ft of floor space). In renovating almost the whole house, the contractors have pulled some sections of the panelling off in every room. All 3 bathrooms have been gutted back to the studs. In the other rooms, some have large sections of panelling removed and some have smaller sections. We can see insulation in all of the exterior walls and some of the interior walls. No evidence of any rot in any of the wall studs so far (and really all of the wet areas, incl kitchen have the panelling off), so we are going to assume the studs that are still hidden are OK. We are having a whole-house rewire and the electrician is just cutting out the panelling wherever he needs to get access to wiring. I don't think this has made much difference to his costs. Once the plumber and electrican are done, the drywaller will go thru and sheetrock everywhere. We need to watch for the trim around windows and doors. However, we prefer a modern/minimal style and so we are just going to take it all off and he can either wrap the drywall into the window recesses or use a special J-channel (i think thats what he called it) to make a clean edge level with the window recess. Oh, and on a side note, the inspector with his fancy infra-red moisture-detecting camera missed a rotten subfloor under a leaking shower and missed that the entire subfloor of an add-on office room is rotten through. Very unhappy about this. But pleased with the outcome of the wood panelling dilemma! Thanks for your advice, everyone.

I have this 4 season room with old wood paneling. I was hoping there was drywall behind it but when I removed electrical panel I saw that the paneling is almost an inch thick as you can see in the picture below. I got a quote from a contractor he wanted to charge $2000 to install drywall. I really don't want to pay that kind of money. I'm pretty handy and I think I can do this myself. I'll try to save as much window trim as I can. How should I go about getting this done.

There is no way to predict how long it is going to take until you know what kind of mess is behind the paneling. You may encounter holes, construction adhesive stuck to the drywall, holes that you made with the crowbar if you're not super careful, moisture damaged drywall, mold....to name a few possibilities. This is roughly how I would approach the job: (Assuming you don't have another bathroom...) 1. Set up a hand wash station in the shower. Wash bowl on a bench. Bucket of water & dipper or pitcher. Electric kettle if you must have hot water. (Possibly eliminate this if there is another sink nearby.) 2. Remove the vanity so you have more room to work. 3. Remove as much paneling as you can. 4. Remove the water tank from the toilet. (I hope you have a two piece toilet.) This should give you enough room to remove the paneling that is behind the toilet. 5. Patch, paint, etc. behind the toilet. Replace the water tank. (Use the old toilet until the room is almost complete to avoid possible damage to new fixture.) 6. Finish patching & painting the rest of the room. 7. Install the new toilet. 8. Install the new vanity.

On the other hand if we removed all of it, the house would be consistent and look less 1970s and more 'second half 20th century modern" The house doesn't need to be consistent i.e. all the walls the same. Panelling was almost always done on some walls only. The panelling, windows and angled walls make the house look very mid century modern, a look that was very "in" in the 1960's and early 1970's, then was "out" for awhile, and for a few years now has been very "in". (My stylish 32 year old son is furnishing his house with Scandinavian style, both real 1960's and reproduction.) So by removing the panelling you are making the house more 1980 -2010, when this look was 'out". I wouldn't do that.