What is the best way to start a bathroom remodel when there is ancient paneling glued on top of bathroom tile?

Question:The bathroom needs a total makeover (vanity/walls/toilet/tub/showe... Most everything else we can handle, but I have no idea where to start with the walls. Any ideas? Thanks!

Answers:
If you're going "all out", then you'll probably want to remove everything down to the studs - wallboard and tile together. First, turn off the water and remove all the fixtures. Disconnected the electricity to that room.
Then you can go after the ceiling and walls with a 5 pound sledge hammer and crowbar, working from the top down. Wear a hard hat and goggles when you do this. Broken tile shards in your eyes are not pleasant! You don't have to hit things that hard. The wallboard and tile should crack with a few blows and then you can pry it off with the crowbar.
Then you can cut out the old wiring and relocate it to your new configuration.
After everthing is ripped out, you're totally free to rebuild with more modern materials. You'll probably want a basic underlay of something like Wonderboard for the walls, followed by whatever finish surface materials you prefer.
If you're doing this yourself, get a good guide to the construction techniques. They are not difficult, but, in a bathroom or kitchen that gets moisture, it's important to work carefully so that there aren't any leaks or places where water can get to that could cause future mildew or rot.
Sunset has a bathroom book you might want to look at for starters. You can also get advice from places like Home Depot or Lowe's who also will have the materials you need.
Have fun remodeling!