I would get rid of the t&g, put up new strapping (1x3 firring strips), and drywall with 1/2" thick drywall min. Anything thinner will bow down and be a mess on the ceiling. Rent one of those special hoists/jack thingys that is made for this task at one of your local rental centers. Also, removing it will allow you to find any surprises up there and you can put up a better poly vapor barrier before you drywall. Also, these older houses usually need the firring strips (strapping) to level the ceiling, as the joists might not all be the same dimension, etc. Put up all your strapping 16" O.C. with only one shiny 8p nail, no ringnails or galv. in each joist. Then eyeball it or string it for flat and pry down and shim any high spots. Then, after it is fairly flat, you can put another ring nail or screw into each joist. Having only one, smooth nail at first allows easy prying and leveling. If you put two ring nails in each then you would curse every time you need to pry down to make it all flat. Use plenty of insulation up there, put in extra phone, cable speaker and computer wires now while you can. You will probably wish you did later. You can buy them all bundled together here: http://www.smarthome.com/8682.html although you can probably find the same stuff cheaper somewhere else.