I'd match the height if using subway tile. Yours is a situation in which a counter matching 4" backsplash would work well. (Or to the bottom of the windows.)

I am interested in what the pros suggest. If it were mine, I would run up to cabinets and then match that height around window

Can you take a picture showing the other side of the kitchen? I would like to see whats going on there before giving my advise.

I would need a closer look, but ultimately id only go to the ceiling dependant on material choice( size of subway may not brick or running bond so well in the small returns to some tastes) lay it out first..........................its always safe to match cab height, Im never a big fan of tile backsplash on top of 4" return counter splash, seems like an afterthought most of the time, although it works good with earth tones and travertines..

Counters are in now! Here are some Better shots of the whole kitchen. I am worries now that subway tile is going to be too much white but I really want to do that! Maybe I should paint the floor grey? Help!

I would go all the way to the cabinets keeping it leave around the entire kitchen. Beautiful by the way!

Live with it before you decide to do any painting as those cabinets are going to make the room darker than you think in spite of having several windows.

Thank you for the pictures. Big help!

About the backsplash, I will go all the way to the cabinets and behind the stove. Yes, it will look white, but that it's not a bad thing. You are the only one who can decide if you like that look or not.(see the ex. pic)

If you don't, you can incorporate grey on the floor, but you should do it on the backsplash as well. Maybe with 2 or 3 rows of grey glass mosaic. That is if like the look of glass, of course.

I hope this helps.

P.S: I notice your sink. Do you have enough space for your faucet?

Beautiful cabinets! Will you share the paint color?

The function of the back splash is just that, to maintain back splash. Since you have a low window in front of your sink, you could forgo the tile completely. That being said, you'll need something where the counter meets the wall.

As for design, I'd choose a funky wall paper and only do it between the wall and cabinet on the wall without the sink.

I'm not sure what you mean Paula. We are using the sink that was previously there so I think it should work fine.

I would share the paint color if I knew it. I have the formula that my carpenter used on the new wall of cabinets (wall with the stove) but it is not just a commercial color. Sorry! Thanks for the nice compliments :)

What a relief... Yours is a drop in sink. It should work fine you have enough clearance between the window and the faucet. I asked because with an under mount sink you have to drill the hole for the faucet and I didn't see neither the hole or the space for one.