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Bath Remodel Questions - Tiling

The shower pan in our 2nd story bathroom started to leak and the bathroom is dated (master bath) so the Mrs and I want to redo it. We're having a lot of trouble getting good bids from contractors - even recommended contractors - and the ones we've gotten start at $10k just for labor which seems high. So, being cheap, I'm thinking about doing it myself. Plus we should be able to get what we want if I do it. But I have some basic tiling questions because of what I've seen on the net. 1) If we tile the walls in the bathroom, part of the way up, should I remove the drywall and put the backerboard up? I'd like to avoid "caps" if possible. 2) I keep seeing mastic used in some instances in the bathroom but in others I see mortar. Should I use the mastic on the wall outside the shower and the mortar in the shower?

Also, if you know of a comprehensive book on bathroom remodeling basics, that would help too. :eek:

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