Tackling a peeling wall of plaster may look daunting but it's an intuitive process once you know the right steps. Before you begin, however, figure out why the surface is peeling or bubbling to begin with---and if your answer involves water, you should seek out professional help to fix that problem before you start. Water is the scourge of construction and renovation because it cannot be masked over.
Prepare the surface by scraping off any old paint or bubbling surface texture. You can use a putty knife or wide blade scraper. Wipe off residue with a damp sponge.
If surface is mildewed you must treat it with a mildew remover. Spray it on and leave it on. Reapply only if necessary. Rinse well. When dry, scrape off loose particles. Then you might want to paint a layer of a mildew killer such as a plaster sealer or KILZ.
Plan on filling deep holes, pits or crags. Mix a joint compound---or a drywall mud---such as a fast dry setting type joint compound (See link below) or use Sheetrock® Easy Sand™. For long cracks, you may need to open them up a bit and then fill in (and over) with a joint compound made for walls. If they are too large, a drywall paper tape should be applied to cracks.
Apply the joint compound in thin coats---also referred to as "skim coats"---until the flaws are covered. Use a modified arc sweeping motion, with the towel angled about 15 degrees to the wall, and smear the edges to a taper. You can smooth any ridges with a damp sponge if you wish. Let dry completely. Sand between coats.
Apply a final coat in a texture to match the previous surface. If starting a large wall in an all-over application, don't be afraid to experiment with different techniques.
Paint if you like, just wait several days up to a week for the plaster to dry.