Regardless of what type of building you are dealing with, there is always a transition between wall and floor material. While some materials can run tight to an adjacent surface, on ceramic tile and natural stone installations, there must be space left between the floor tile and the wall tile to allow for seasonal growth and shrinkage with the changes in the weather. The Tile Council of North America recommends a gap of at least 1/4 inch between all floors and walls.
Seasonal movement affects all types of installations, ranging from wood to natural stone to concrete and ceramic tiles. When the climate is warm, wood and other materials expand to absorb the heat, while in colder weather, they shrink. This seasonal movement can cause tiles to pop off the floor and wall if there is not enough room left to accommodate the expanding and contracting of the house during climate changes.
Foot traffic can cause excessive movement in a floor -- another reason to provide for a joint between the floor and the wall. Without a joint, the movement from foot traffic can cause the floor tiles at the outer edges to compact against the bottom row of the wall tile. These shock waves will affect the installations over time, eventually causing cracks and adhesive failure.
Typical cement grout is not sufficient for the space between the floor and wall tiles. Latex and polymer modified grouts are required because of the additional elasticity included in the blend. Additional liquid latex can be added to the grout if you expect excessive movement, whether seasonal or otherwise.
Latex, acrylic and silicone caulks are the preferred materials for filling in the spacing between wall tile installations and floor tiles. Caulk is extremely elastic and specifically designed to fill in transition joints, expansion joints and inside corners where movement is expected over time. The type of caulking you use is up to personal preference, but any type of tile caulk will do the trick.