Warning, this is not painting advice: Is this a home office or commercial, big or small room? Recently I noticed some dark paneling that had been done-over by stretching some deeply-textured light fabric over it from floor to ceiling. It was done in very wide strips leaving similarly-width panel in between. I thought it looked pretty nice. It is a big room and I don't know how well it might scale to a small space.

We had some ugly paneling in our last home and it was in my office. The problem with paneling is that it moves with humidity, heat and cold. I had my plasterer fill in the cracks and sand and then the man I hired to wallpaper put some kind of fabric-like material that was similar to interfacing that you use in sewing and then wallpapered over this. It worked out great and we lived there for 12 years with no problems. But there might be something new on the market now that is less labor intensive.

Our 10' high family room was oak picture frame paneling, dark and ambered. About 10 years ago we painted the entire room plus the beamed ceiling a rich cream color. The painter's nephew was a body shop guy, and he caulded every seam in the room. It took a few hours but well-worth the effort. The only gaps in the paint are from seasonal shifting in the foundation, a problem we had anyway.

My living area is exposed with 1x10 planks. I painted them white, but no caulk. I plan on caulking, filling knot holes, etc. and repainting to make it look more "refined." Expansion/contraction is always present in wood, but should not be a huge concern in a conditioned space. You mentioned panels: Is this solid wood or plywood? Plywood is even less likely to be an issue. Lastly, as mentioned, use a high-quality caulk: Price is proportional to quality. Some sealants allow for 150% elongation, which is insane for interior applications. And, don't forget to prime the joint BEFORE caulking. Good Luck!