Now just regrouting shouldnt be that bad, but it sounds like you have to check the back of the tile to see if you have water damage and rot, meaning that just re-gluing the tile and regrouting wont be that easy.
I dont like those separate piece tub surrounds, but we did install a one single unit tub and faux tile surround that I liked. There were no seams for water to get into, and it was easy to keep clean and no grout to stain or wear out. Something like this
http://images.search.yahoo.com/images/v ... Of.z5Mpd3TI think you'd have a bigger project than expected since you'd have to remove your tub. But they do sell seamless tub surrounds only that sit on an existing tub, but you'd have to remove all your old tile and still check the wall for damage.