How should I prepare drywall for wallpaper?
Yes you should still mud, tape and sand all of the drywall joints especially if your drywall has beveled edges. Ideally you would also apply a coat of primer before you apply the wall paper as this makes removing it easier down the road, and if you do ever decide to paint it, at least all you'll need to do is remove the wall paper and paint and not have to deal with mudding the joints.