I have had good results using tile for thebase board in bathroooms. However, they were set over a tile floor that had a concrete foundation and the walls were good and sound (no water damage/rot in bottom plate).
If you do put tile on the wall with a differant type of floor I would use a laytex modifier in the thinset and use a thin spacer to hold the tile off the floor while you set and grout. Then finish the small gap to the floor with some of that flexible grout in a tube for a calking gun.
[url=http://www.SteveJNichols.com]My Website - SteveJNichols.com[/url]
[url=http://bent-nail.blogspot.com]My Blog - Sticks & Stones[/url]