I would consider doing the whole wall, but here is a site that may help you decide. Lot's of finished kitchens to look at. Click on the 'All Kitchen Photos' to see thumbnails of finished kitchens.

How does the wall wrap around toward the right? I think I need to see a photo from further back to make a call on this.

The rendition is a bit different than your actual kitchen. There looks to be more wall space above the cabinets in the rendition.

Going by your link, I would bring the tile up to the cabinet molding line. I would end the molding at the cabinet line. The space that will be empty above the counter needs to have a piece of art to fill the void.

Using a different tile than the field tile, you can go straight up to the ceiling behind the hood.

I would only tile the entire wall if it was broken up by a door, which you do not have.

I think a better picture of your kitchen would be more helpful than the rendition. Including the window you mentioned.

I would stop it at the hood. I've never seen tile go above cabinets to the ceiling. Well, I have seen it a time or two and I don't like the floating look.

You'll also have the floating look over your peninsula to deal with because your wall cabinet ends a bit too short of the end. You can't stop the tile directly under the cabinet with that much counter extending beyond. I might put a shelf over the peninsula and tile to the bottom of the shelf. Then put another shelf about a foot above that one. You can only do this if you have enough length between the cabinet and end of the peninsula--a 12" shelf won't work, but 15" or 18" would. You might be able to tile to the window and down to the floor to achieve this. It looks like that's what they did here.

Lucy McLintic · More Info

Here's another way to extend tile out to the surrounding mouldings by adding a matching chair rail at the top of the tile over the peninsula.

Kitchen Backsplash · More Info

Mine goes to the ceiling (in the midst of a baking/cooking marathon and not everything's put away yet). But so do my cabinets. In your case, I don't think I'd want to do 2 whole walls, including above the cabinets. So I'd suggest stopping at the vent hood, and then either going to that height next to the window and the end of the peninsula; or following the bottom of the cabinets for those areas.

Our backsplash goes to the ceiling behind our hood. We don't have molding/trim on top of our cabs, don't know if that makes a difference.