3x6 Glass Subway Tiles would look great! It would really accent the vertical feel of the wood cabinets or even a stone and glass linear!

Great start and finishes with the granite and cabinets. You can easily do glass tile for your back splash. I am attaching some multi colored samples. I love how glass tile gives depth. Also attached is a sample of a solid polished tile. Adding a border or accents to it will add detail.

I hope these samples inspire you! Matt

For more design inspiration visit my blog: http://mummeinteriors.wordpress.com

Glass, stone mosaic pattern in browns, stainless and clear would be pretty.

So beautiful, a very nice kitchen! The Tile Ideas above are great, but so is your wrought iron decor. I don't want to lose it. Consider painted beadboard as backsplash, painted like the wall color.

Or a very subtle 3x6 honed travertine, still utilizing your decor.

You could also consider a metal tile backsplash. Your vent hood appears to be stainless steel, so I am assuming you have ss appliances and the metal would really complement them. Plus it would bring out the lighter tones in the granite:

I do like bead board but I do not think it would do justice for this kitchen.

Matt

I have decided on a backsplash but want to put soft lighting underneath cabinets first. Anyone have any suggestions as to type and brand?

I just recently purchased magnetic lighting pucks from Amazon. No wiring needed! The only drawback is the light is narrow and focused.

What about something like this? It's light, it's neutral, it's creative AND it still adds a nice touch because all types of light will reflect off it.

Mirror would be nice,you can protect it with a peice of glass on top of the mirror.We built a splash for a customer with mirror, shattered gass then clear.

Thanks so much for all the advice. After many trips to the tile store , we decided on a tile and lighting and it is finally finished!

Before and after

What would you do to update this kitchen? The rest of the house is light warm tones and the trim is white.