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From the wall street journal online:

"Etiquette and tipping experts agree that tipping a contractor and his employees isn't expected because contractors offer to do a job for you at a specific price. Any extra money they would want would be built into their bid. Also, it's a business relationship rather than one where they are performing a personal service for you like a waiter or a maid. But if the employees do extra jobs around the house, then experts say it is appropriate to tip a cash amount equivalent to the task; "tip gifts" such as cookies and drinks can count. "The key to tipping is whether or not it was outside the scope of what was normally expected," says Mark Brenner, author of "Tipping for Success!"

My opinion is that a little bit of courtesy (snacks, drinks, expression of appreciation etc.) goes a long way and upon completion of their work you feel compelled by a job well done to offer a little extra in the form of a tip - go for it, but do not feel obligated. 

Agreed.  If you have existing cracking in porcelain you need to know the cause first.  I don't know of any reputable contractor that would dare install tile over existing tile.  Also, any manufacturer warranties for defects would be null due to improper installation.  Did the contractor offer this solution or did you ask for it?  The mear fact that he is agreeing to or offering it tells me you need to leave this guy for someone who knows what they are talking about before he does only half the job which will have to be redone in the near future, costing you more in the long run.

I get so many calls from customers that were talked into a "cheaper" way to do something only to find the work very sub-par.  The sad part is they are out the money they spent in the first place along with the additional amount I have to charge just to undo what the first contractor did before I can do it right.  This floor could end up costing you double what it should if it's not done right.

Todd Shell
Todd's Home Services