1/4" backerboard plus 1/3" tile is 0.58" 5/8" = 0.625. When you put mortar in, your going to be probably 1/8 - 1/4" higher on the tile side. Use an appropriate threshold and you'll be fine. You do not want to try to level by selecting a different trowel size. It isn't going to do you any good to have a level transition if the tiles are not bonded properly.

I would not add anything that sticks out much into the walkway on that long wall...people's shoulders will whack them going by! And at the risk of horrifying everyone, I see no reason why you shouldn't paint the three walls of your kitchen a different shade from everything else, if you want to. A warm gold-toned tan would give a good backdrop to the things you want to use, and make the kitchen into a space of its own. I would also pull the ledge off the pass-through and add a generous countertop supported by big iron brackets on the family room side where your family and friends could sit while you are in the kitchen, and that you could use as a serving surface or bar. That would solve your no-table problem in a simple way. Since you don't have a window, your big wall is the ideal place for a really big mirror, the size of an actual window, which you could then surround with four prints that suit your style. I agree that you shouldn't clutter things up...you don't have the luxury of a lot of counter space, so you will need to keep your counters pretty clear of things that are only decorative. You can put something nice in the corners, though...Ballard has a group of white urns that are purely decorative, but you might do well at antique shops and fleas, too, and find things you can actually use (these are purely decorative). And I would hang that wonderful plaque on the larger wall over your fridge, so you can get it up higher and see it from the family room. Here is a link that might be useful: Ballard urns

Wow, so many replies so quickly! Thank you. I will try to answer all the questions but I might miss something... * In our part of Texas, there are NO basements because the water table is simply too high. * We also do not have a garage. * The laundry room is too small to steal any space from (the washer and dryer back right up to the kitchen's adjoining wall) nor is there any room in there for the freezer. * Totally agree about the wasted space 'down south'. My ultimate dream would be to bump out the wall and build a 'great room' there with tons of windows to catch our spectacular sunsets. * With 4 kids always in and out for drinks, balls, or potty breaks, or for hubby to get to his grill or the shed, the back door really is used very regularly. And yes, it really is only a 30" aisle. * The entry/front door measurements are a bit off since I started too near the top of the paper and ran out of room, lol. The entry itself is 53" (of which the open front door cuts into by 36"), but there is a framed walkway into the kitchen/DR which only measure 46" W , if that makes sense. It really is a bizarre layout. I apologize for the crude sketch - I know I need to do it properly in some online software or something but I still need to learn how. :)

Don't worry, I'll be going out of my way to salvage as many pieces of tile I can. The local salvage place doesn't take used tile (only surplus unused tile), but I'll offer it up on Craigslist to a DIYer - I'm sure there are plenty of hipsters who would LOVE to get their hands on vintage subway tile.. Same with the colorful glazed tile on one of the bedroom fireplace hearths - tile is loose and many are broken, and with those tiles having not been made in probably a hundred years, I can't repair it without it looking like a janky patch job. They would be fantastic as accent pieces in a kitchen backsplash or in a mosaic art piece. Luckily in these parts, all the houses are old and folks love nabbing your cast-off materials for their own projects, so I'm not too worried about the tiles being lost to the landfill if we don't reuse them ourselves. Now I need to start researching and perusing materials. Definitely want to avoid the obviously contemporary pillowy/beveled tile. Luckily, those little hexagonal porcelain tiles are kinda back en vogue, so hopefully I can get my hands on some equally tiny non-beveled ones. Depending on the design, might do some black accents/patterns. As for my kitchen, they didn't do tile on the kitchen walls back then - all the cabinets (like the built in ones in butler pantries) were backed with beadboard, so I'll be doing beadboard for backsplash. Heh, if you want pics, I'll have to remember to dredge this thread up in a couple years. We're taking things slow with fixing this house up.