from the picture it looks like the floor area is very small- probably less than 40 sq ft. I would tear up the old tile and replace it with something more updated - and add some nice complimentary or matching tile to the shower. You will find that to lay a tile floor in that small a bathroom is not that costly, especially if you already have a tile installer there- it will probably cost less than doing the shower itself and in the end you will be much happier.

Thanks for the help guys. We actually like the floor and want to stick with that color family/look. Also we are doing it ourselves so no tile installer and the budget is fairly limited as we are already replacing an exhaust fan and doing some plumbing work once we have the shower ripped open. Are you advocating away from the idea of a contrast between the shower wall and the floor? We though it would look nice to have them not be the exact same but we aren't totally sure.

I would do a simple white, or slightly off white (matching the countertop), subway tile. It is a timeless look so you won't feel like you need to change it again in a few years. Consider repainting too and maybe switching out your light. The paint color is making the space feel very yellow

I think a light tan would be nice. I wouldn't want the shower darker than the floor for sure.

Make sure you read up on proper waterproofing for a shower. If you aren't sure, please check out the John Bridge Tile forum or you will be doing it over down the road. I also think a white subway would look pretty. I did my bathrooms years ago in white subway and they still look fresh.

http://www.johnbridge.com/vbulletin/forumdisplay.php?f=1

Does your shower tile need replacing, or do you just want a different look? White tile is classic. And, waterproofing a shower is a skill--not just anybody, let alone any tiler, gets it right. If there are no issues with the tile, maybe consider not replacing it.

The larger the tile the better, but no bigger the 13''x13'' ish for that size room. Less grout better for you and the life of the room. Helps open up the look of the space. Tile shower walls to ceiling as well.

Thank you everyone for the input. To answer a few questions posed, the wall needs to be ripped open for some pluming work and the tile is wearing away in some parts. I was worried that white would look off with the beige floor but that seems to have some traction so I will look more into it. The walls definitly add a yellow quality to the room and are getting painted as soon as the tile work is done based on what color would look best with the tile we select.