I'm trying to decide what to do with the basement (late 70's)
paneling--it's either a quick sand and paint or drywall? Opinions?
The house will be sold within the next year or two.

I think I've got the same paneling in the basement of a house I plan to own
for a good while. I'm going with the sand and paint option. I've seen it
done before, and if you sand adequately and use a decent primer, the result
is nice.

What sort of grit are you going with? 320? Although I do like
Colby's suggestion of TSP instead of the sanding :-) But TSP is a
cancer-suspect agent, isn't it?