Subway tiles are generally a traditional look, but there are plenty of ways to make them appear more contemporary. Check out these pictures:
The subway tiles in this bathroom have a cottage-style look, but the combination of the updated fixture and cool grey wall color brings it up to speed.
Try using subway tiles as a horizontal strip in the middle of the wall, with larger square tiles covering the rest of the space.
Another option: Use smaller tiles for the horizontal strip and subway tiles for the rest of the walls. And use color!
Pictures via Flikr