If you want to do this, then I do recommend reading Beryl's article in Cloth Paper Scissors, visiting her website to see her samples, and/or to get her book, Mixed Media Explorations. I have her book and I am still trying stuff from it.
When you do this, use freezer paper and not wax paper. Wax paper will stick to the muslin and can be hard to get off. I use a layer of paint tarp, freezer paper, and then muslin.
Use the thin, white muslin that you can get at Joann's. The natural muslin does not work the same. I have tried both and like the white muslin best. I don't use PVA, I use watered down SOBO and it works great for me. Make sure you leave gaps in your paper when you put it down instead of overlapping so you see no muslin. You should see small sections of muslin like 1/4 to 1/2" from paper to paper. What I mean is to leave gaps so you see a little muslin when you are putting down the wrapping paper and putting the glue wash on it. That gives you the flexibility you need to have it more like fabric rather than paper. I did it overlapping and it was way too thick and rigid.
I like the bolder colors on my fabric paper. You might want to use bolder images from your wrapping paper instead of more muted patterns. If you really water down your paint, then fainter images will be okay. I buy the cheap rolls from the dollar store, WalMart, etc...I look at the contrasting patterns more than anything else. I cut mine into squares and rectangles. You can do whatever shapes you like. I also like to use book text. I have some really bold text in different languages. They look great as part of the background.
Beryl recommended the white craft paper from Michaels on top. Not all craft (tissue) paper is the same. The batch before this one was too thick and it obscured my images too much. I used the Michael's one and it turned out much better. You also need a light touch when brushing the glue wash on top of the tissue paper or it will come right up in a clump.
I like to put on several colors to blend together on one large sheet. I go from light to dark. I go back and put on some more light color if it is too faint. Go in one direction and that will lesson the chance of the tissue paper tearing.
On top of the tissue paper, I like to put on some handmade Japanese paper. I am talking about grid paper and the white swirly paper. It is like thicker tissue paper. I cut that into strips and put it on with the glue wash before putting on the color.
Remember, your colors will have a different look after it dries. Your images will not be as bold as before due to the tissue paper and color wash. You want some of the background from the wrapping paper to come through. I made that mistake of using wrapping paper that was not contrasting enough and it all got washed out after the glue wash, tissue paper, and then the color wash.
You can easily stamp and even emboss on top of the fabric paper when dry. You can iron it with release paper between the fabric paper and iron to get a softer feel to it. I don't bother usually. I also like to use glitter pens and do the bandana technique on the parts where I stamped. You can also use foam stamps and use paint to put on some contrasting images after the fabric paper has dried.
If you get a chance to take a workshop with Beryl Taylor, I really recommend it. She does a fantastic job and is a very fun instructor. I rarely recommend workshops. I really have to like one before doing so.
I just made a batch of 4 sheets. Some for a swap and some for a project. I will scan and post after it dries tomorrow. BTW, save your freezer paper. I keep it in between my dried sheets of fabric paper so they don't get stuck together. When drying, I peel off the fabric paper and turn it over so the bottom side also gets a chance to dry.