Tiling: How to do corner (pic available)?

You need bullnose. See:
http://www.ehow.com/how_6104409_install-edge-tile.html

How to bullnose tile video:
http://www.youtube.com/watch?v=1e_JxV8zgL4

Wall tile installation video including bullnose tile:
http://www.youtube.com/watch?v=c04TCBQSf2E

If you need more info just use a search engine and type in "install bullnose tile".

Good luck with your project!

Last one, going to sleep:
What is bullnose tile (installation tips):
http://www.onlinetips.org/what-is-bullnose-tile

You can use bullnose but you can also use a schluter edge which is a nice metal detail

You are asking about bullnose along the vertical transition in corner between the tile and painted wall? That seems very strange to me to install bullnose there. The only thing I would probably do is use the Schluter strip, as Jeff/Primer suggested. It could add a nice detail and also add a buffer in the tiles are not cut perfectly, or the walls are not straight.