If you're looking to waterproof the floor, run the Ditra up to the shower pan, and cut it nice and uniform, leaving about an 1/8" gap, and then caulk it. Also, pick up a roll of Kerdiband to seal up the seams in the Ditra.

This does not sound like a do it yourself job. Maybe I should just bite the bullet and have someone bust it up-since the old cast iron tub will have to be busted up to replace with a shower. I know how I felt when I tried to remove the wallpaper and found the walls ill prepared-then discovered that there were at least 2 different layers of wallpaper under the one I was trying to remove. Boy was I hot!!!. Wallpaper had to become part of my wall and get painted. That is probably how someone would feel about tile over tile.

I'm not going to comment on the differences between the two options, we never even considered a pan and it was never an issue with our contractor. In addition to having to build it in, you have to allow a couple of days for the concrete to cure, so I'm sure it takes longer. It makes sense that he wants to take the method of least resistence "and get it done to be done with it" because time is money and the quicker he can finish your job, the quicker he can move on to the next. But that doesn't mean that you should be asked to compromise what you'd prefer to do just because it will benefit your contractor. Get additional quotes and stick to what you either vision or can afford to do. Also, when my GC was tiling our master bath, I ran into a similar situation with our niche. Bill told me something that really put things into perspective and changed my whole approach to the project. He said, "He who holds the golden egg is the boss" In other words, it's your project, you're paying the bill, so you make the call. If it's not a job he wants to do, find someone else you feel comfortable with who will.

I have that same bathroom. It's original to the house, which means late 60s/early 70s. I've tiled over one bathroom and am preparing to do the other one. The new tiles are so much nicer than the fiberglass pan. In our case, I don't think we could've tiled over the fiberglass pans: They weren't flat. Yeah, yeah, the new tile floor isn't completely flat either -- it slopes towards the drain -- but I don't see how it could work.