Bill: Thank you for the pics. They really helped us see how this may need to be done. The Schluter edge looks fine for the edges. Not quite as crazy about it for the outside corner edges (although it looks like you did a beautiful job with it). Question: for the outside edges around the recessed window, I wonder if we should just skip the tile in that recess and do a jamb and casing for the window out of some waterproof moulding, if such a thing is available. The window is fairly high and small, 48" x 12", at the back of the tub/shower enclosure. It starts about 73" above the floor, where the existing tile ends, so it won't get a lot of splashing from the shower. We were just going to continue the new replacement tile up to the ceiling and tile in the recess around the window (it is recessed about 3"). We are placing the existing old window with a new vinyl window. If we could find another way to waterproof the recess, like with a waterproof jamb and case, maybe that would work. (Does such a thing exist?) Of course that still leaves no solution for the tile niches we were planning for the walls of the surround. Maybe a complementary trim from another tile series would work for those? Thank you for your quick response. This is really aggravating. Work is starting tomorrow, when I also get on a plane for the E Coast. (I promised my wife that everything was ready to go and that she would not be left with any problems!) I like to plan these projects down to the last detail, and this was so unexpected.

mtnrdux, I think you could really tell the difference between the Subway Ceramics version and newer subway tile if you had them installed side by side. The American Olean 3x5 I have from Lowes in my bath are perfectly nice, but they aren't quite authentic in terms of flatness - they have a bevel to them that reflects the edges and makes them look more modern. Schnauzer, both Emser and Lanka Tile make a nice white subway that's slightly less $$ than the Subway Ceramics version. You could also try Iron Gate tile.

I second Marcolo's thanks for thinking of me/us. The color variation in those Mandala tiles is about what I was looking for. Unfortunately, I believe they also have size variations characteristic of the handmade look. Here is what they say in the installation guide: Sinu is a specialty tile. Tiles will vary slightly in shape and size. Allowance shall be made for this variance and grout joints shall be no less than 3/16" wide. Maybe some day I will settle for grout this wide, but I am not there yet! Thanks so much again for remembering and recommending.

Since it's a backsplash, not a shower wall, tiling can be done with a gentle product called Mastic (which is ready mixed) instead of thinset (which is mixed from cement on site). All the information above regarding thicknesses still applies, but you don't need backerboard so you don't need to split backerboard. You can mastic (or thinset) onto a painted wall or onto bare sheetrock walls. Not onto the patched portions of the wall. There it needs paint. This is adequate for a backsplash, in many people's view. Since it's Stainless Steel, you do have the problem that not much sticks to it. Calling it a flange is good too. Search using keywords "bathtub riling flange" to see diagrams of how this works to make it disappear behind the tile. I'll bet that the flange / cove was a Good Idea and a Good Thing to Have. Without it, the large surface area of your counter might warp a bit like a large sail. One day someone will stand on the counter, and you probably want the counter to remain flat after that person gets off the counter. With the flange, it has additional support to keep its original shape and flatness, to the Nth degree.