Every paint job I have ever seen that was over the old paint looked atrocious and chipped and peeled badly after a short time. One advantage to this is that the bike will probably not be stolen... I like to call this 'uglifying' the bike.

I have had good luck completely stripping the frame and repainting with Rustoleum or similar cheap hardwear-store brand spraypaint. I had one townie bike I did like this that lasted months without any significant chipping (but then was stolen :/).