Normally i would agree with you... however, these cupboards are just so trashed. the pictures don't really tell the whole story. At any rate, we've not painted them yet and due to both time and money constraints - it's not happening anytime soon, lol. I have a hard time with spending money on something that is going to get thrown away in the near future.
What are the cabinets; dark stained pine? You will be lucky if a coat of white paint even helps them. They look really bad and dated now.
Yes, its going to be easy to make our money back on this place when we decide to move on. I'm really not too sure about the down stairs yet. I haven't given it much thought yet. I've seen the paint over the wood paneling done before and I don't disagree that it looks pretty alright. But, there is just something about it that looks half finished. I guess it all come down to available funds at the time. I've even heard of people that fill the gaps in the paneling to make it looks smooth, but I'd be afraid it would be damaged if someone where to lean up against the wall and there was any flex. Not to mention, for all the time spent, it would probably be more worth while to just re-drywall.
Yeah, it's hard to say what would look best. I think the painted wood can look kind of cottage-y, but I know not everyone likes that look.
I found this blog that has before and afters photos of someone who painted over their wood. Thought you might want to see it.