What happens is that the material breaks downs such that the foam backing detererorates and the fabric falls away from it. It you took it apart, you would see that what's left of the foam is still stuck to the board. And the bummer is, the only really good way to repair it is to remove the board from the car, scrape it clean, and re-adhere new material.

Read this from the 700/900 FAQ's:

http://www.brickboard.com/FAQ/700-900/InteriorTrimandPanels.htm#HeadlinerReplacement

It's an ugly job to do, especially in the hot weather. After I did mine, I found there were local professionals that would do it for as low as $250, which is probably well worth it. I spent the better part of an entire weekend doing it.