In my home I just ripped it out to the studs. From there I decided to
insulate the walls, take out the old wiring and put in new (also added
a few outlets) Met some termite shells from years ago. Removed the
damage that they did....
Decided to put in new install (not remodel type) windows.
All in all, I am very happy about taking out the old crap. It was allot
of work, but in the end the home is more efficent (insulation) termite
damage that may have never been seen was taken care of (a stud here and
there was just about eaten away, not good)
It really depends on how you like to do things... Usually the right
way is not the quickest or cheapest way. But in many cases the results
will come out even better than expected. If this is a home that is a
"transitional" home that you want to get rid of in a few years, do
whatever is quick and cheap. If this is a place you plan on being for
awhile, do the right thing.