Deciding which paint to use has gotten much easier now that acrylic latexes have pushed oil-based paints almost to extinction. The acrylics offer superior performance (they don't harden with age, the way oils do, so they move and breathe without blistering), they don't mildew as readily, and they emit fewer VOCs, so they comply with new air-quality regulations. They also work over both oil- and water-based primers.
If less than half the old paint is left, however, it may be worth stripping it all off. Guertin gets rid of stubborn remnants using shrouded grinders (like the PaintShaver), infrared paint strippers (such as the Speedheater), or chemical strippers (like Multi-Strip), then smooths the wood with a course or two of sanding. When siding (or bank accounts) can't take the shock of a total strip job, Rich O'Neil, of Masterwork Painting in Bedford, Massachusetts, has successfully hidden rough, well-adhered paint under Peel Bond, a thick primer.