Ahh, the old "bubble gum" approach. A time-honored tradition, not to mention *such* a lovely look for any home.
Ahem. Well, hopefully there aren't too many spots like that. Fear not, you can patch plaster. There are sites and books that show you how to do it with the real McCoy, or if you're lucky and the rotten stuff doesn't go all the way through, you can also patch with drywall joint compound.
Hopefully you have smooth walls as the original finish? In my case, the hard thing about spot patching in my 1922 bungalow has been matching the various textures that were original to the house. I have a friend who is a professional plasterer who notes that I have four, count 'em, four different techniques going. The important thing to do is to keep practicing until you understand how to duplicate the texture. In one instance, I had to slap the drywall compound on the ceiling with a dishwashing bottle brush! Of course more compound got on me than on the ceiling, but in the final run, you can barely tell where the patches are.
This is a good place for advice and tips, as well as a healthy dose of philosophy. Keep the posts comin' and we'll keep dosing you!