Many people have done this. I am not sure if I have seen examples of having the 4" backsplash removed though. Scroll down to tergar's Fnished Backsplash! post for the latest GW example of this.

My granite supplier advised using tile from the granite up (no granite back splash). She could have advised the other way and made a little more money, so I think she advised based on her honest opinion. I also like the "no granite back splash" look better. Just guessing, I'd say the only reason to use the 4" granite back splash would be if you weren't going to use any other back splash at all (a more low-budget option, in my opinion).

Nice! If you can't contact the designer of the kitchen in the photo, you could probably make your own mix. Try Fireclay for the colors (free samples online, but if you're in the bay area, go to a showroom).

Thanks! One less decision to make. Flat tile it is!