Hi Torrey, I'm just a DIY'er, but here's a link to my thread:
http://www.johnbridge.com/vbulletin/...ad.php?t=57207
I need to upload more current pictures as the surround is actually tiled now, but I think it'll get you started on your project. My surround is already down in that first picture. They just had drywall up behind mine.
The surround really needs to be waterproofed before you tile it. It can basically be done 3 ways. I'm listing these in order of ease (at least for me)
1. Kerdi - goes right over the top of drywall and then you tile right on top of it. You can search here or google for it and get info about it. This is what I did in my bathroom. It's the orange stuff.
2. Cement board with a paint on waterproofing membrane like Redguard. I didn't go this route because cement board is more difficult to work with than drywall.
3. Mud. This is the preferred method for a lot of the old school tile guys. It's a bit of an art and I think take some practice to perfect. Maybe if I was doing the whole shower instead of just a surround I would have gone for this, but I thought it was a little much for me to take on for a smaller project like mine.
So, if you've got sheetrock behind your current tile it'll probably need to be replaced with one of the above choices. I think technically you don't have to waterproof all the way to the ceiling, just below the height of the shower head. I chose to go all the way to the ceiling just for peace of mind.
Hope that helps. I'm sure someone with more experience will be along to chime in too.