Do you need to sand paneling before painting?

Yes, to remove any dirt or other finish

Either sand or use a deglazing solution. Use a coat of oil based primer and then paint.

Scrub first with TSP to get it really clean. If it has a shine you need to use a deglosser. They make products that are TSP and deglosser in one step. Then use two coats of a good quality primer before painting.

Wash it down and just lightly sand to remove the gloss. Prime with a good stain blocking primer like Zinsser 123 or BIN. the paint. If the paneling has grooves you can fill them with drywall patching compound. Let it dry overnight. Next day go over the patch with a damp sponge to smooth it out. Prime and Paint. Deglosser (which I don't like) is good for painted or sealed surfaces. Won't do anything for paneling.

Kiltz is a good primer too.