Unless vinyl wallpaper is the type specifically meant to be painted, it's usually best to take the paper down and paint the wall. In some cases, however, the wallpaper can't be removed without damaging the wall, or the surface is already so damaged that the paper provides a smoother surface. In these cases, proper preparation can result in a nicely painted wallpaper finish.
Paintable vs. Standard Wallpaper
Paintable vinyl wallpaper is a very different product than standard vinyl wallpaper. As its name suggests, paintable wallpaper is designed specifically to receive paint. It doesn't require any special treatment or priming, and the glue will not loosen or bleed through when it is painted. Once the glue has dried, it can be treated the same way as drywall that has already been primed. Standard vinyl wallpaper, on the other hand, is not intended for paint. The slick surface repels paint so it does not stick tightly, and the glue can loosen and cause bubbling in the paper or marks in the painted surface.
Repair and Preparation
Seams are likely to show no matter what, but they can be minimized by sealing with caulk or wallpaper seam glue and then sanding the edges after they are dry. Also, seal the seams at the top and bottom along the ceiling and wall with clear caulk to prevent the wallpaper from curling away from the wall. Glue any tears and patch any holes.
Cleaning
Remove any dirt so that the primer can stick to the vinyl wallpaper and there won't be any rough patches created by dust or lint. Use a mild detergent and wipe down the wallpaper with a damp rag. Don't saturate or get the wallpaper wet, or the glue could loosen from the wall and bubble on the surface. Wait for the wall to dry completely before priming.
Priming
Primer is the material that will allow paint to stick to the wallpaper, and keep the glue from seeping through the paper and into the paint. Use an oil-based primer, or one that is designed to also function as a sealer. The oil or sealant will create a barrier that keeps the wallpaper paste in place. Water-based paint, such as acrylic or latex, can still be applied over the oil-based primer. Apply a single thin coat of primer using a brush to cut in corners and a roller on the remainder of the wall. Let the primer dry, usually about three to four hours, before applying the paint. Use a second or even a third coat of primer if the vinyl wallpaper is very dark and your paint color is light.
Painting
With primer in place, vinyl wallpaper can be painted in the same manner as any other primed interior wall. Use a paint that complements the decor and will withstand the traffic and use of the room. For example, use a semi- or high-gloss paint in a kitchen or bathroom to provide protection against moisture and frequent cleaning. Tape off the edges and any trim, and fill in corners with a brush. Use a roller to paint the main part of the wall, using a roller cover with thin nap for smooth wallpaper and thick nap, between 1/2 and 3/4-inch, for textured wallpaper.