The Collaborative International Dictionary of English v.0.48:

Panel \Pan"el\, v. t. [imp. & p. p. Paneledor Panelled; p.
   pr. & vb. n. Paneling or Panelling.]
   To form in or with panels; as, to panel a wainscot.
   [1913 Webster]

   Paneled back (Arch.), the paneled work covering the window
      back. See Window back.
      [1913 Webster]

The Collaborative International Dictionary of English v.0.48:

paneling \pan"el*ing\ (p[a^]n"[e^]l*[i^]ng), n.
   1. The act or process of forming in panels or decorating with
      panels. [Written also panelling.]
      [1913 Webster]

   2. The panels which decorate the walls of a room.
      [PJC]

WordNet (r) 3.0 (2006):

panelling
    n 1: a panel or section of panels in a wall or door [syn:
         paneling, panelling, pane]