I just purchased another home. The former home owners built a second storey addition which is L shaped. It is a master bedroom and it measures 10 1/2 feet by 21 feet then the L section is 8ft by 7 1/2ft. Under it is L shaped covered deck. I would like to add more insulation in the ceiling as there is not much there. The former owners used drywall as ceiling on the outside,which I will take down, insulate and then I would like to side the under part with aluminum. My question is, do I have to put up plywood on the ceiling then side with aluminum or can I just run the aluminum over the new vapor barrier?

First off, the vapor barrier should be on the warm side of the insulation (above the insulation in this case). Alternatively, you could use foam insulation (see the links below) in which case a vapor barrier is not required. There is no need to put up plywood before putting up the aluminum soffit. Ideally, the soffit would be perforated to allow for ventilation of the cool side of the insulation.

You may have to put up chicken wire or something similar to hold the insulation in place while you are installing the aluminum soffit.