I would wash the walls with TSP before you paint...your post has been here unanswered for awhile. You may have already gone on with it. Tri Sodium Phosphate should clean up your walls real nice for painting. What I have learned from painting ourselves is that you always need to clean the walls first. I can't say for certain, but I believe that stains can bleed through fresh paint. I don't know if this falls true for nicotine as well, though.

Nicotine and smoke will bleed through regular paint, what you need to do is use a good primer, like kilz, this will seal the stains, then paint over with your preference of paint.