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Yes, many types of peel-and-stick wallpaper can be used in bathrooms, especially those made of vinyl or polyester. However, its success depends heavily on the level of moisture and ventilation. In bathrooms with good ventilation, such as those with fans, it can be a durable option. Peel-and-stick wallpaper may not adhere as well as traditional wallpaper in very humid conditions. For bathrooms that see a lot of moisture, like a kids' bathroom or a full bath with a steamy shower and poor ventilation, even high-quality peel-and-stick wallpaper is likely to peel over time.

Wallpaper steamers can be very helpful for removing large sections of wallpaper more easily, but they’re not always a good idea for DIYers. The drywall behind your wallpaper is meant to stay dry, and excessive moisture from improper technique with a wallpaper steamer can leave you with severe wall damage. Drywall also retains moisture, which could result in mold growth over time. It’s best to hire a professional to remove your wallpaper with a steamer to avoid wall damage and related moisture issues.

Painting over wood paneling is an option that can save you money and time. However, if you go this route, the style and texture of the wood you paint over will still be evident. Painting over paneling is an excellent way to modernize an otherwise outdated aesthetic. Instead of removing wood panels, consider painting them a bright color–like white or ivory. This is essentially wainscoting, but without any of the required installation. 

To remove pre-pasted wallpaper, you’ll need to wet the wallpaper or steam it to loosen the paste on the back of the wallpaper. Spray the paper with water, then let it soak for 10 to 20 minutes. From there, you should be able to peel off the wallpaper. Then, you may need to follow up with a cleaning solution and a scraper to remove any remaining wallpaper paste on the walls.