I recently had to redo my kitchen due to hurricane damage...it had paneling in the kitchen and tile up the walls-UGLY, with some hideous wallpaper over it and 40 year old fixtures. I ripped the walls down and used luan board instead of drywall. In an old house, it may benefit you to pull down the walls and see what your electricity looks like under there anyway. The formica will probably be hard to get off of what is under the walls anyway and will damage them, so just get that good old pry bar and rip it out. Once the Luan board was up, I primed it and used this really cool texture by Behr and then painted. My house is about 50 years old, and the electrical was a nightmare in the walls, plus I went on and insulated the walls. I was able to add new outlets and new plugs for the fridge, dishwasher and disposer. I was also able to add GCFI boxes which my old kitchen did NOT have before. Actually, I had an electrician do the wiring, but it was certainly worth it because the electircal in the kitchen was a MESS.