Depends on how much you want to do. BTW, one option is to put 1/4 over the existing ceiling (after you poke some holes to find the joists).

I agree, just find the joists, throw some 1/4 inch drywall up....use screws...not nails...also squirt liquid nails across the back before fastening it up. Tape, mud (in 3 steps) wet sand and paint. If you're not good at taping and mudding, hire that part out. It should only be 200 bucks or so.

After you find the ends of each joist, snap a chalk line from end to end. Then line up the edges of the drywall with the lines to fasten the edges properly.

Going over the existing ceiling will not work. IT has some weird texture on it that comes down a few inches....further then it looks in the pic. It looks like stalagtites you find in a cave. Not exactly sure why anyone would do this....but it's ugly and thats why we're replacing it. We tried to scrape it off but it's hard plaster and won't come off.

Hmmm, maybe you could create a low light "cave" theme and even accent the room with an occcasional stalagmite jutting up from the floor. Maybe some water trickling down the wall....

The existing plaster will have to come down. To keep plaster dust localized to the living room, all doors should be kept closed, and taped around the edges with duct tape. Any windows located in the living room should be wide open. If there is an open walkway between the living room and the rest of the house, it should be covered with plastic sheet, and taped around the edges. Wear a respirator when removing old plaster. The floor can be covered with cardboard, if you can find enough cardboard. A pvc dropcloth will give some protection to the floor, but not as good as cardboard. The broken pieces of old plaster should be packed up in cardboard boxes, or heavy paper bags. Its best to keep each bag/box below 25 pounds weight. You will need to confirm that your local garbage/refuse service will pick up construction debris. When the old plaster has been removed, the exposed lath can be sheetrocked (faster) or you can apply basecoat plaster followed by finish plaster (slower). If you have never worked with sheetrock before, it might be better to have someone with more experience do this task-lifting and nailing sheetrock to a ceiling is hard work.

Use furring strips,(2x4's flat).You will only need to scrape where the strips contact the ceiling, and the strips can be shimmed to give you a clean/level/even ceiling. You could also place 1-1/2" foam board panels between the furring strips for more insulation.Then use 1/2" sheetrock. Contract this out, with the exception of finishing the drywall,(if you have a feel for this), and the painting.

Looks like that old rooster is still runnin' amuck doin' the funky chicken dance on your ceiling!

If getting estimates, get more than one and always get references, and check on them. Best if someone is referred to you by someone you know. Dont go with the lowest bid unless that person checks out with your references/referalls, and they appreciate their work.

As far as diy, are you tooled up for this with the right tools and safety equipment? Is this something you would do in the evnings and after work?Are you set up to pick up materials and haul debris off,(truck)?

I think you need to weigh in those concerns on a project like this, as contracting out will eliminate those worries, but you could do the finishing ,(mudding,paint),yourself.Whatever route you take, i would advise the demo/installs be left to a reputable contractor/handyman.