what about the functionality? It might look better not the have the granite but will it keep the wall dry?

You need some kind of backsplash above your granite countertop. I prefer to have a tile backsplash that goes up to the bottom of the upper cabinets, at least in the sink or stove area plus adjoining areas.

If you have a large expanse of countertop which does not have a sink or a stove, then in that area only, you could use a 4" granite backsplash. Otherwise as Lori suggested above, it will look like you "cheaped" out.
Carolyn Albert-Kincl, ASID

Yeah, I was not saying no backsplash - I was just saying no 3-4 inch back splash of matching granite. Do a contrasting cool back splash of either stone, glass, whatever you like. This is a great place to add alittle personality. just don't go overboard.

and the functionality of it? A tile back splash will keep the drywall protected and not allow water to seep behind it?

I feel that in areas which require only a 3 to 4" backsplash, a matching granite backsplash looks better.

We did a glass backsplash. Just went to a local glass company and had some tempered glass cut, painted the back and installed it with some J molding. It looks great and you can change the color easily.

I prefer granite all the way up, tile all the way up, or just a 4-5" granite backsplash. I think having both granite for a few inches then tile cuts the wall up awkwardly. However, I've seen it done well that way, but generally I think it looks better to just pick one.

I have granite counter with no 3/4 and tile from counter up.It looks great and is totally functional and will protect your walls,no problem. Choose what YOU like.