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I have old old plaster (on lath) bordering new drywall. Is it better to use mesh tape or just paper?

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On a corner? On the wall itself? If the former, use caulk. If the latter, you might have a bigger challenge blending the two wall textures together seamlessly. Might be easier to cover it all with new drywall. – DA01 Jan 20 '13 at 21:45
wall itself. no, i'm not covering with new drywall... – amphibient Jan 21 '13 at 2:32

Mesh tape works really well. Some guys swear by paper though.

I prefer mesh because its really idiot proof and quite forgiving.

Plaster will crack though. Just a matter of time and how many tractor trailers roll by your house.

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Mesh is definitively a better blending product. I like to embed mesh with the lightweight setting joint compound and then use general purpose (premixed) joint compound for topcoat and blending.

AFA plaster cracking, there are large size mesh rolls meant for skimcoating and repairing plaster. One I know of is 36" by 150' by FibaTape

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