If your paint is not peeling too bad I would just remove the loose stuff. Then, if the paint is not a gloss, apply a coat of PVA glue and give the walls a skim coat or two (until the walls are uniform) of EasySand90 (U.S.G.).
If the walls are gloss or semi-gloss you will need to sand them first.
After the walls are prepared this way you will then have to sand them.
Give them a coat of high quality iol-based primer and paint!
Brian Ewing Ewing Restoration http://www.ornamentalplaster.com