Regrouting Bath/Shower Wall Tile

Hi,
The grout on my shower walls is starting to crack in several places. I think I may have to regrout the tiles.
I've never grouted anything before, and I would like to learn as much as I can before I remove any of it. I've read a lot of online guides, but sometimes they omit information, or their instructions conflict with other sources. I was hoping you guys could clarify a few things.
I'm curious about the depth I'm supposed to remove the grout to. Many of the Dremel guides say to remove 1/8" of the grout; other places say to remove 1/2-2/3 the thickness of the tile; and a few of the sites for floor tiles say to remove the grout all the way to the substrate. At this point I'm leaning towards removing 1/8", as the tiles are 1/4" thick. Is this reasonable or should I remove all of it? I think the tiles are mounted right onto the drywall. I'm going to be using a manual grout saw, not a Dremel, if that makes a difference.
Should I definitely be using a Portland cement-based grout and a separate silicon sealant? The stuff I bought before doing any research is some sort of "Premixed Grout for Wall Tiles" that is "siliconized and ready to use." It says it's "water repellant", but it's probably bad anyway, right?
That's all I can think of at the moment. Thank you in advance for your response.
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snipped-for-privacy@hotmail.com wrote:

I regrouted our shower stall in master bath couple of months ago, my first ever tile work. Used a Dremel. We have 1x4 tile, about 40 years old, secure but for pinholes appearing and couple small areas not filled when installed. I bought pre-mixed but the label was confusing - some indication not to use in wet areas. So....I went to the website, checked out mfg. instructions and decided to use dry mix. No big deal to mix it, and the project went nicely. Hard work (for me). I was confused about the depth to cut old grout, but went with the 1/8 minimum because the whole job was, originally, apparently very well done and our problems just a matter of surface wear and tear. It looks gorgeous. Hubby got helpful when it came to sealer and put it on too soon because he wanted to use THAT shower. We also put a timer switch on our exh. fan so's we can try to keep the room dryer without pumping out all the AC.
I was well into the job before I discovered the tile below the soap dish was loaded with soap scum - in spite of lots of previous elbow grease and CLR. When I began scraping it with a razor scraper, the odor was really strong; ended up with quite a pile of soap :o) Now I wipe it down every two or three showers to try to keep it from accumulating.
I dinged a couple of tiles using the drill because there wasn't sufficint space betw. tiles in some places, and should have used a saw there. We used Custom Building Prod. Polyblend, white non-sanded. The old grout was a little gray and I was worried about which color to use - try to match or just use white. Didn't do the whole stall, and didn't want contrast, but white is fine. If I do the remainder some day, I won't have to figure out what color I used :o)
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The most important thing to learn is that removing old grout requires extreme labor, and the result is usually a mess.
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A pro told me to use a utility knife. The special grout saws are often to thick. With the dremel you can do a lot of damage.

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