I have a 1906 brick bungalow. The interior walls are plaster over lathe. Bedroom walls have layers of wallpaper underneath paint. It is peeling in some of the corners and under a window area. Also, the plaster underneath appears to have dislodged in a few places--I can see some areas where the wall is uneven. Should I try to remove all the wall paper? Can I leave it and repair it somehow? The walls desperately need to be painted.

Also, the living room was re-plastered at some point leaving ugly overly textured walls that have some cracking--very unattractive! One friend recommends sanding down and surfacing with sheet rock mud--then priming and painting. What is the best way to make these walls look better? How can I repair cracks?

Thank you!