Thanks for the advice. She's lived in the house for 14yrs (5 with me) and the previous owner allowed it so the damage had already been done when I bought the house. The house is straight out of 1970 so I planned to completely redo anyway when she leaves (even if every surface wasn't nicotine stained.) She's paying well above market rent and after redoing it, I won't get much more than I am now so I don't see the incentive to have her leave now.
Nathan, when she leaves, I planned to do what you said, scrub, oil prime and then latex. I hated the idea of going through all the extra effort cleaning now since she's still going to smoke like you said and it's not like I need to remove the smoke smell.
She never asks for anything so I didn't mind spending a couple hours painting. I just don't want to create extra work in the future since the nicotine will be behind a layer of paint.
I think I may actually tell her no and explain why.