spackle over wallboard

[Hank Sacco]

I'm getting ready to rehab a 1950's house.  The wall board in the house looks like some kind of brown pressed composite material, not a gypsum material.  Wallpaper was originally on the walls but somewhere in time the walls were skim coated with spackle or plaster and painted.  Now the coating is starting to flake off the walls.  I can try to remove the loose plaster and fill in the chips or I can remove the wallboard completely and install new sheetrock.  One option is cheap but may not hold up well, the other option will cost lots more but be a better fix.  I'm just wondering if anyone has encountered this before and can offer another option.  I'm pretty sure trying to remove the plaster and wallpaper would be much more labor intensive and would probably make a mess of the wallboard.