You can remove all trim(s), and lightly sand the gloss off of the paneling. Then treat it the same as drywall finishing using mesh tape on the seams and perforated paper tape on inside corners and where the wall meets the ceiling. or just caulk along the cieling if not finishing the cieling.Two coat the tape joints as well as filling the grooves, then for a third coat, skim coat the entire surface.For the third coat, i would use topping compound , as it finishes nicer with less shrinkage. Then texture,(if wanted), prime and paint. Before doing anything, you should inspect the paneling for any water stains to see if you might have moisture issues,and if that's the case, deal with that first, as you will eventually end up tearing out the new work you just accomplished.If you do have water leakage problems, find out the correct method for dealing with it in your area.

OK, now I understand. I would use only pressure treated or metal structural support and styrofoam for insulation. Then, green wallboard (moisture resistant). I would install it with screws, but not tape the seams. Cover the seams with a nice piece of wood trim which could easiy be removed accessing the drywall sections. Would only be necessary to locate the screws for the center studs for the section when removing one. As for an entirely removable section, I believe it would be necessary to attach the drywall to plywood or another surface. My concern, based on the conditions you describe, is that the plywood would warp and ruin the wall. Another thought - install a flush door (either hinged or a door panel) where the problem areas need inspection. Hope this helps a bit.

annz, our house is a foursquare and the rec room will take up two of the quadrants. My husband's workshop is in the front quadrant that you don't see, and the rear quadrant is on the other side of the wall you asked about. In there will be my laundry area, a small bathroom, and the furnace room. I like your idea of a stained glass window; I saw a couple of real beauties on ebay that would be big enough. Unfortunately, they were more $ than I'm looking to spend -- I seem to have kinda expensive taste. suero, smart solution. My cats would have a blast with those blinds. I don't know how well it would work for a stretch of 22' though. Annie, I asked my contractor about the code issue for the electrical panel and then confirmed what he told me online. Electrical panels can't be in closets with combustibles like clothes, and there are requirements for working space around the panel, but they don't have to be in the open in our area. Thanks for the thought though...much better to check out issues like that sooner rather than later. During lunch I walked up to the antique stores in the neighborhood looking for ideas. One store had 4 narrow paneled shutters (2 sets of 2) that were the right width. Another store had a large 8 pane window with that snowflake obscure glass that I could paint the back of. This weekend we may head to the re-store and see what they have in the way of louvered doors. So I saw this photo online. This window is bigger than I had in mind, but I like the idea.

What you do in the way of adding walls or finishing them depends upon how you want to use the space. How will it be used -- one large open rec room or are you planing to have a "quiet" space and another that is more active? Will there be a visible heater that might suggest a (faux) brick wall around it would be appropriate? Wouldn't add brick walls only to paint them. Faux brick panels will do -- but wouldn't be my first choice for your walls other than, perhaps, as one accent wall -- above and behind your cabinets with your base cabinet fridge/cooler in lieu of any "backsplash". Can you add a bar sink in that row of base cabinets? Are you planning to add overhead cabinets over the base cabinets as well? What furnishings do you plan for your basement ... modern digital gaming related? old fashioned board game table relate? exercise equipment? mix of these? This is the peel and stick faux brick if you decide to go that route -- just get white rather than paint it white: https://www.amazon.com/Wall-Stickers-20pcsWall-Home-Decor-Products-Self-Adhesive/dp/B01N0DRQF8/ref=asc_df_B01N0DRQF8/?tag=hyprod-20&linkCode=df0&hvadid=216767879473&hvpos=1o3&hvnetw=g&hvrand=17246921767692145337&hvpone=&hvptwo=&hvqmt=&hvdev=c&hvdvcmdl=&hvlocint=&hvlocphy=9011029&hvtargid=pla-386905854434&psc=1