In general, paneling is not a popular item. However, in an older home, in areas such as a basement or a den/study, it may add to the overall character (as long as it is in good condition). Painting it may be the best option (even in a den or basement) if you need to "fill in" any areas that may have had pictures hangers, etc. If the knotty pine is located in a formal living area or a kitchen, buyers usually want to see it gone. That being said, if sheetrocking and finishing are not in your budget, I would simply price the home accordingly and leave the decision up to the new owners. If you would like a complimentary market analysis, please feel free to call me. Teresa Downing 443-286-8765. Deciding what your home may be worth in this market may help you make the decision about whether or not to spend the additional funds on sheetrock.