Scrub the rusty patches with a scouring pad. Don't scrub too vigorously. You want to knock off loose rust without scuffing up the paneling. If the rust doesn't come off on its own, don't force it.
Sand the remaining rust with 300-grit sandpaper. This fine sandpaper buffs out remaining rust patches that didn't come loose from the scouring pad.
Clean the bedroom paneling with trisodium phosphate and a sponge.
Apply liquid deglosser to the paneling, using a rag. Many liquid deglossing solutions work almost immediately, and you can wipe off the deglosser just a few seconds after application. The sealant applied to paneled wood is difficult to paint over, and sanding down this topcoat could damage the paneling. Liquid deglosser removes both glossy and matte paneling sealants without any complications.
Spot-prime the nail and staple marks with rust-inhibitive primer and a synthetic-bristle paintbrush. Rust-inhibitive primer will cover any lingering rust discoloration, and it prevents future rust deposits from seeping through the paint. Wait at least two hours for the primer to start drying.
Prime the entire bedroom wall surface with a general-purpose interior primer. Use a medium-nap roller on the main paneled surfaces and a synthetic-bristle brush for edges. Wait 24 hours for the primer to dry and cure.
Paint the wood panel bedroom walls with flat latex paint. Medium-nap rollers make short work of large areas, while synthetic-bristle brushes are useful on edges and corners.
Remove the painter's tape and plastic sheets after 24 hours.