To whitewash dark paneling, tape off fixtures and adjoining areas, and apply gel stripper to the wall to remove the existing varnish and stain. Remove the stripper with a putty knife, wipe the wall thoroughly with mineral spirits, and sand the wall. Clean the wall thoroughly to remove dust, mix a cup of water with 1/2 can of white paint, and apply the mixture to the wall with a brush. Use a cloth to wipe the wall immediately after painting.
When sanding the wall, use 60-grit sandpaper followed by 120-grit sandpaper, and sand in the direction of the grain until the surface is smooth. If grooves are present, wrap a piece of the sandpaper around the end of a flat screwdriver to sand the grooves, and use the flat edge of a screwdriver to remove the gel stripper from the grooves in the paneling.
Alternately, prepare the paneling by removing the existing stain with stripper, and clean the walls as recommended to remove the stripping agent. Apply diluted bleach to the stripped paneling, and allow the bleach to soak into the wood to lighten the color. Apply the whitewash to the wall with a paint brush, and wipe each section of wall with a cloth immediately after painting it to achieve the desired appearance.