Update the knotty pine paneling with a fresh coat of white paint. Sand the varnish off the paneling and apply an oil-based primer to hide the knots. Paint the walls off-white or gray if solid white does not suit your taste.
Remove the knotty pine stain to lighten the walls. Sand the paneling to remove the stain completely. Wipe the walls with a damp washcloth to remove the dust. Apply a coat of polyurethane to the surface after the boards are smooth.
Add white trim or molding to the walls. Apply the trim around doors, windows and along the base of the walls to update the room.
Apply a new stain to the knotty pine. Sand the walls to remove the finish. Wipe the dust off with a damp washcloth and apply a lighter stain to the wood.
Update the flooring in the room. Old carpet or wood floors can cause the room to look outdated. Install tiles or new carpet in neutral shades of gray, slate, porcelain or white to make the room more modern.
Place modern furniture in the knotty pine room. Add an upholstered couch, new chairs or a cabinet to the room that match the knotty pine decor. Furniture in shades of yellow, blue and gray will complement the wood paneling.