Last year I purchased a 79 Champion Grand Slam with a similar ceiling issue. First I took care of the roof. The moisture from leaking roofs will cause the stuff to delaminate and deteriorate. My fabric also had a thin foam backing on it that had dried out to a crumbly state. I also checked around for suggestions and painting was one of them. "Popcorn" ceiling pa it was also suggested.
What I ended up doing was tearing the fabric out to the edges of all the cabinetry, walls, etc, and then replacing it with cheap, white bathroom paneling. Looks a lot better and was fairly easy to install. The old addage, measure twice, cut once, is a good one to go by!
You can see pics of the whole thing here. http://m113.photobucket.com/albums/k...f5l0E%2F3yw%3D
Sorry for the long link! :-)