Mildew/mold in basement behind panel

Hi,
Another question that I hope someone can answer.
I have a small section in my basement that is covered by a really ugly, 70's era wood paneling. There is a little mildew / mold on it now and I'd like to fix that. How does one go about that? The paneling is ugly enough that I don't mind replacing it with something nicer. How does one go about this? Do I just get someone to tear it down, caulk any leak, and then put something new up? What do you put up in it's place?
Thanks,
Josh
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