GreenDesigns, thanks for your input. I am not plastering, just skim coating a thin joint compound over the entire drywall surface to even out the contrasting textures between the dry wall paper and the smoother areas of joint compound at the seams and at the screw sites. Maybe "skim coat" is the wrong term, or used loosely in this application. I have read multiple opinions on the use of moisture resistant wall boards. Opinions are very divided. I was miss leading in my OP in that this is a moist room, as this room has never gotten steamy in the 22 years we've lived here and there was no fan. There is no shower, just a tub. But, because this is a bathroom I can assume there is more moister than, say, the living room. What I have read regarding regular drywall is that if it is used in the non wet areas of the bathroom it really is more important to have a proper primer and paint installation to protect the wall system. When my kitchen was done last year the drywallers did skim coat my walls, I just wasn't there to see how they did it. I have watched the USG video and it is straight forward enough. I have attached a link below. Lastly, to provide some context, this room is not our main bath, that is why there is no shower. This bathroom is next to my kitchen. The bathroom is really a combo utility room/bathroom for our farm house. Here is a link that might be useful: US Gypsum video on level 5 finish.

My 1935 house has the same "problem." On every ceiling you can see the 16"x4' seams. It is also like that on all of the upstairs walls and many of the downstairs walls. We did a kitchen remodel a couple of years ago and it was interesting to see that the some of the walls were plaster and lath and some were either the gypsom or beaverboard described by others. I thought maybe they splurged for plaster and the living and dining rooms, but there didn't seem to be much method to the madness. I'm not sure whether its the plaster coat or the boards themselves but they are literally rock solid. I have to use a drill to hang anything, and many times the drill bits break. The grooves don't bother me as much as the peeling paint. In a few of the seams on the ceilings the paint literally falls right off. I'm not sure if I should blame it on a bad paint job or the materials in the ceilings. I also have the faux-tile that ken tn speaks of. It went all around the kitchen from the floor until about five feet up. It was in the bathroom and the half bath as well. In the kitchen the previous owner just plastered over it, but you can still see the pattern in places. I'm not sure if it was a stamp or something premade, but it is definitely not 4" ceramic tile. I don't know that the finish or paint colors have made much of a difference. It's very visible on the flat white ceilings and very visible on the various colors of satin walls. I did find many of the same old colors, lots of teal, green and coral around too.

Thanks Casey, What is a good oil based primer. I will be using BM paints for the room. I could get their primer. I have only used Zinzer primers up to this point, in my kitchen, and now bathroom. My progress: Last night I went ahead and thinned down some green topped joint compound (drying type, I believe it is called, as opposed to setting type) and rolled it over the Gardz primed walls. After I knifed it off you could barely see the application, just a soft haze. My thought is that I will now apply another thin skim, then when dried, prime for painting. I just don't want these layers to delaminate in the bathroom. This isn't a steamy room because there is no shower and the tub is rarely used. But it is a bathroom none the less.

My experience is with lath & plaster, not plaster over blueboard, but there are some things in common to both methods. Basecoat plaster will generally include some type of fiber, horsehair(around 1900) and today, chopped fiberglass. It can also include perlite, or sand. It cures by chemical reaction between gypsum and water. Cured basecoat plaster has a rough surface, which makes for good adhesion for the top layer, finish coat plaster. Finish coat plaster contains hydrated lime, or lime putty, and gauging plaster, a finish grade of gypsum plaster. Enough water is added so that the mixture is stiff enough to support a trowel, but loose enough to spread. These days, it is getting tough to locate finish lime, the raw material for lime putty. You will have to do some research to find a vendor, but it can be had.