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Yes, you can apply peel-and-stick wallpaper over wood paneling, but it requires significant preparation for a good result. Peel-and-stick wallpaper has a weaker adhesive than traditional wallpaper and works best on smooth, non-textured surfaces like painted or primed drywall. Because wood paneling is often textured with grooves, any flaws in the underlying surface will likely be visible after application. To prepare the paneling, you must ensure the surface is free of cracks, holes, and protrusions by filling any indentations and sanding rough spots to create a smooth surface. An alternative is to remove the paneling and apply the wallpaper directly to the underlying drywall or plaster, provided it is in good condition.

You may end up with extra wallpaper once your project is finished. Hang on to that wallpaper, as you may need to use it to patch up areas that get damaged later on. If you have a lot of excess wallpaper, try getting creative with it. You can use it to line the inside of a cabinet or drawers, for example.

Having dated, peeling, or otherwise damaged wallpaper can decrease the value of your property, so removing that before listing your house is nearly always a good idea; however, since wallpaper tends to be a personal style choice, potential buyers may or may not love your aesthetic as much as you do.

Love the look of wallpaper but want to consider property value as well? Stick with something that is easy to change. If you are thinking of selling soon, make sure your wallpaper hanging is on-point and looks professional with no crooked seams, evenly matched patterns, and minimal bubbling or other imperfections.

When choosing materials for finishing basement walls, consider factors such as moisture resistance, durability, and fire resistance. Opt for materials specifically designed for basement environments, like moisture-resistant drywall or cement board. Insulation with vapor barriers can help regulate temperature and prevent condensation. Consider using mold-resistant paints or coatings. 

Research and consult with experts to select materials that are suitable for your specific basement conditions and intended use. Prioritize quality and compatibility to achieve long-lasting and aesthetically pleasing results.