I've just done much the same to my '84 Winnebago Elandan.
The original vinyl wallpaper was peeling and not attractive.
My first suggestion is to use a heat gun and remove the vinyl paper. Painting over it is a pain. I found that you really do have to use oil based Kilz to get adhesion. It's thin and messy. Then if you choose to apply new wall covering with contact adhesive there's a good chance the paint will react with the paint and you'll get bubbles and poor adhesion. DAMHIKT.
The vinyl paper comes off rather easy with the heat gun leaving you with bare Luan. The Luan will have a shiney surface which is the old adhesive. I used 100 grit sandpaper to rough that up.
On my walls i used a couple of different things. In the bedroom I applied a really nice Pearl White Upholstery Vinyl right over the Luan which looks good but does reveal flaws in the substrate.
In the front areas I used a thin plastic panel - like that thin white plastic they sell at HD - only textured and in a medium grey. It's a nice surface yet thin enough that you can cut it with shears.
On the ceiling I used 4mm white CoroPlast
applied with Weldwood spray upholstery adhesive. I say Weldwood because the 3M adhesive didn't hold.
I used aluminum strips along the edges to hold it up as well and give it a nice look. These are the wallboard cap strips that HD sells in the tile and flooring department.
Overall it's turning out well. I'm in the process of putting up CoroPlast in Natural finish around my galley walls.
If you have a plastics supplier in your area - go and see what they have. Regal Plastics here has CoroPlast and they had the grey material - it comes 4 x 10 - $30 per sheet.
Hope this helped some...