This article includes a introducing more precise citations.(November 2011)
Lath seen from the back with brown coat oozing through
Lath and plaster is a building process used mainly for plaster process in the United States.
In the United Kingdom, lath and plaster was often used for interior partition walls and the construction of ceilings, before the introduction of plasterboard in the 1930s. In the U.K., riven or split hardwood laths were often used of random lengths and sizes. Splitting the timber, as opposed to sawing in straight lines, followed the grain of the timber which greatly improved strength and durability.
The process begins with wood wall studs. Each wall frame is covered in lath, tacked at the studs. The lath is typically about two inches wide by four feet long by 1/4 inch thick. Each horizontal course of lath is spaced about 3/8 inch away from its neighboring courses.
Temporary lath guides are then placed vertically to the wall, usually at the studs. Plaster is then applied, typically using a wooden board as the application tool. The applier drags the board upward over the wall, forcing the plaster into the gaps between the lath and leaving a layer on the front the depth of the temporary guides, typically about 1/4 inch. A helper feeds new plaster onto the board, as the plaster is applied in quantity. When the wall is fully covered, the vertical lath "guides" are removed, and their "slots" are filled in, leaving a fairly uniform undercoat.
It is standard to apply a second layer in the same fashion, leaving about a half inch of rough, sandy plaster (called a brown coat). A smooth, white finish coat goes on last. After the plaster is completely dry, the walls are ready to be painted. In this article's photo ("lath seen from the back...") the curls of plaster are called keys and are necessary to keep the plaster on the lath. Traditional horsehair which reinforces the plasterwork, thereby helping to prevent the keys from breaking away.
Eventually the wood laths are replaced with rock lath (also known as "button board"), which is a type of building code standard measurements). The holes serve the same purpose as the spaces between the wood lath strips, allowing plaster to ooze through the board when the plaster is applied, making the keys to hold the plaster to the wall board.
In addition to rock lath, there were various types of diamond mesh metal lath which is categorized according to weight, type of ribbing, and whether the lath is furring.
Lath and plaster has been mostly replaced with solid plasterboard (also a type of gypsum wall board, although a bit thicker), since it is faster and less expensive to install.
An advantage of using lath is for ornamental or unusual shapes. For instance, building a rounded wall would be difficult if drywall were used exclusively, as drywall is not flexible enough to allow tight radii.
Traditional lathe and plaster has superior sound-proofing qualities when used with lime plaster (which is denser than modern gypsum board).
Preservation Brief No. 21 by the National Park Service. Contains detailed descriptions of Lath & Plaster construction and advisories on repairing and restoring these walls (especially in historic buildings).