Hi Gumby

Whats up man? Coming to the gathering this year again I hope? It would be great to see you!

To answer your questions..

Use a mask when sanding and scraping, lead was banned from use in 1978 so chances are there are lead based paints underneath that top coat if the paneling is older than that.

Scrape off the loose paint and sand the surface all over to create a good bond. That is the most important step. Then clean it with a damp rag and a little mild soap.

I would not use any paint other than Sherwin Williams Superpaint or Sherwin Williams Cashmere. Superpaint for durability and Cashmere for ease of application and the most washable not to mention great looking sheer. Satin water-based paint is what you want for interior walls.

Have fun and welcome to my world I paint all the time...