I have done a few bathroom "facelifts" and the only one I wasn't real happy with was the one where we tried to fix all the deformities in the existing drywall/ceiling after removing the existing wallpaper covering. Ever do bodywork on a car? Ever see a really cheap/poorly done auto paintjob? Shooting the paint is the easy part in painting a car... The real difference between a great looking car paintjob and a poor looking paintjob is the ammount of time and skill spent in the prep work to get the surface perfectly smooth.
On the last bathroom we did(the one I am not happy with) We filled and sanded and smoothed with sponges untill we thought it was gonna look great. Then we painted it and it looked like a piece of painted pavement. We wound up doing a LOT of additional filling and smoothing over the painted surface to get to an acceptable level. The problem you run into is the eye has trouble gauging the surface imperfections in a surface with an uneven color such as you will get after removing the old surface covering(same reason camoflage is successfull). Then there is the dust... If you sand, then there is going to be a LOT of it, fine white and powdery that goes everywhere. A damp sponge on drywall spackling/joint compound is less messy, but has some disadvantages for getting a large open surface perfectly smooth. No matter how well you think you have smoothed the putty/spackling/filler you apply, there is going to be some surface imperfections when you lay down the first even coat of paint.
One option is to remove the existing drywall. New drywall is not very expensive and you can fairly easilly remove it in large pieces with some carefull cutting with a utility knife. The easiest I have found to do it is to find the studs and cut vertically on either side of a stud center and across the top and bottom near the floor and ceiling. IF you cut all the way thru, be carefull not to go deep enough to strike installed wireing. On the studs, You just need to miss the nails or screws holding up the existing drywall. You can then break out the pieces from floor to ceiling nearly the width of the studs. I then use a large cats paw to remove the remaining strip of drywall and the nails/screws from the studs and the floor and ceiling cross pieces. This is a great opportunity to add insulation and a vapor barrier before you put up the new drywall board. The insulation will keep the bathroom heat in the bathroom longer when the room is heated which will reduce condensation on the walls. The longer the moisture stays in vapor form, the more moisture will be drawn out with the ventilation during showers instead of finding it's way onto/into your walls. The new drywall will require much less finish work to achieve a smooth paintable surface than trying to patch the old.
Another option is to smooth off things as best as you can and add an additional layer of 1/4" drywall over the existing drywall. You will need to add standoffs to the light switches, recepticles and perhaps the plumbing fittings so they will match up with the new surface level, but other than that it will finish up as nice as the complete drywall replacement, but you loose the opportunity to insulate.
I have done this all 3 ways and in my opinion, the last 2 are easier with a nicer end result. If I attach any sort of dollar figure to my time(even paying myself minimum wage), then the time difference to achieve an acceptable result easilly offsets the cost of the new drywall.
Good Luck
-tim
