Re Scott, I'm pretty sure the top coat of the paper is down. The house isn't that old (1987), but it's quite possible they didn't prime the walls before the wallpaper went up. Whoever took it down, didn't do a very good job of it.

I have sanded a small area and it seems smoother. My biggest concern is reactivating any leftover wallpaper paste, if there is paste left on there. I am willing to sand, but I don't think new wallboard will be the way to go for us. This room opens to a hall and kitchen, and there will be two corners that will have to be completely redone if we go this route. Not to mention the seams and sanding that would have to be done on the rest of the room.

There is already a paint layer on the wall and it seems to be holding up. Not sure what the quality is of the paint on the walls. The previous homeowner was big into doing things badly and cheaply.

There is no peeling or detachment from the wallboard any places. It's just rough. I'm the resident painter in our house and I have a bum shoulder, so I'm trying to minimize the amount of work I need to do to get these two and a half walls painted before Christmas (while also baking cookies, wrapping presents and decorating).

Thanks for all your suggestions!