Can paneling and wallpaper be textured with drywall mud?
The previous owners of my house did this. Drywall compound will stick very well to wood paneling (please resist the urge to get "creative" with the texture...). Wallpaper, less so, and even if it sticks well, if the wallpaper ever started peeling off, it would take the top part of the wall with it. If you're going down this route, I would highly recommend scraping off the wallpaper first, and only then covering the whole wall with a skim coat of drywall mud.

Or, you could just cover the whole mess up with 1/4" drywall. If you're prepared to do a skim coat over the entire wall and can acquiesce to the necessity of scraping off the wallpaper, simply putting up new quarter inch thick board might be easier and cheaper than going down that route.