How do you update brown panel walls in a basement?

Paint is the obvious choice in this situation. I always like a yellow shade to brighten a room.

Paint. Pick something that complements the rest of your room , or live large and go to the big box hardware store and look for the mis-mixed paint. To be had for a song. and you just might find a color that you can live with.

You can paint them. I did it in a bedroom just because I hated the look. I used spackling paste to fill in the lines between the panels. Fill them in once, then smooth with a wide putty knife. Let it dry. Then sand it smooth. You may need to do it again to get it flat. As a last step, I used a damp sponge to make sure it was truly even with the panels. Then paint. You can use primer, then paint or a paint with primer in it. It will probably take 2 coats of paint - maybe even 3, but do it at your own pace. It doesn't have to be done fast. I've painted rooms where I've done one wall a day. Even if you need more paint and have to finish it after the next check. That's okay. Eventually it will get done. From on senior to another HTH.

Well the only easy thing is of course paint, a light color for sure. If they have gaps you can mud them to make a flat surface , sand and then paint.

When I moved into my current house there was brown paneling on the lower half of the kitchen/dining room walls. I sanded them, primed and painted them white. Then added a chair rail to the top. They look similar to bead board now. After I was finished I saw a paint (or a primer) at Home Depot that is specifically for paneling, the can said no sanding needed. This is what I'm going to try for my next project. The laundry room in the cellar has paneling as well. Good luck!!!!!!