[LazyPup]

I personally prefer the wall surround system but that is only based upon my opinion however you need to make this decision before installing sheetrock or wallboard because the plumbing code has two different requirements here.

If you elect to install tile the plumbing code prohibits water resistant sheetrock (greenboard) in the shower enclosure area. For tile the code requires you first install "housewrap" vapor barrier on the studding, then install conrete backerboard to a point 72" above the finished drain of the tub or shower. You must use water resistant fasterners and all cut edges and fastener heads must be sealed with a water resistant sealer.

You may use water resistant sheetrock (greenboard) behind an acrylic or fiberglass enclosure but you MAY NOT install a vapor barrier behind the sheetrock.

All other walls of the bathroom are to be covered with water resistant sheetrock (again, no vapor barrier) except the ceiling. Tile may be installed directly on the water resistant sheetrock in any area other than the shower enclosure.

Water resistant sheetrock may not be installed on a ceiling if the framing in greater than 12" center to center.