I don't know why it would be uneven where you granite touches the wall unless the granite was cut really uneven or your walls are really uneven. But at any rate, water will not damage grout or cause it to wash away from your tile. Thats one of the reasons people use it on a backsplash. Also the join between the granite and the tile is usually caulked and it becomes water tight. You'll be fine using tile.

Granite is not uneven and neither are the walls. The granite doesn't touch the wall at all at some places. There is a small gap where the granite meets the wall. I am concerned that if I use thin tiles water will get into that gap. Please help!

I used 2" x 2" slate tiles (multicolored) on a mesh backing. I'll see if I can find a photo to post.

not an accurate color of the granite - it is peachy pink/gray/white/black (Raw Silk from India - the "pink" version)

http://s1166.photobucket.com/albums/q601/marksphotos2012/Pear%20Creek%20house/?action=view&current=PA200034-1.jpg

The grout will not get damaged. I've had tile countertops and backsplashes before. Right now, my counters look like yours, granite with no backsplash and places where it isn't a tight fit.

new-beginning
Your granite and the backsplash is stunning! Were the slate tiles thicker like a subway tile? If it was on a mesh backing, does it mean that it was thin like glass tiles? Sorry for asking so many questions. I am glad that you could use thinner tiles even if you have gaps.
belkat,
Thanks for the reassurance! Do you have any tiles right now for your backsplash or in the past with a not so tight fit?