Designing Kitchens and Bathrooms - making an alcove with durock in tub surround

We will be taking our daughters tub surround down to the studs. She wants an alcove for shampoo bottles etc:
My question is, after we fill in the alcove with durock, do the seams amd edges also need to be taped amd mudded?
I also read somwhere that you need to leave a 1/4 inch gap in the corners, is that correct? and do you also need a gap between the horizontal joints?
thanks,

Yes you would mud (thinset) and tape the seams. You should waterproof it, too. You can pick up a product called Redgard, sold at Home Depot. You will paint it on before you tile. This will help prevent any water getting to your lumber. You will also want to pitch the tile so water doesn't puddle in the nich. Follow the instal. instructions for the CBU you will be installing.

Use tape designed for use with CBU (Alkaline resistant).
Use CBU screws or deck screws

Things to avoid:
Premixed thinset and grout

Good luck

You can use thinset to attach the back piece of durock to the drywall in the back of the niche. Attach the side pieces of durock to the 2x4 framing with cbu screws or galvanized roofing nails. Leave 1/8" space between all the pieces of durock. Do not use a vapor barrier behind the durock in the niche. Tape the inside and outside corners of the niche with alkalai resistant mesh tape and thinset. Cover the entire niche (2 coats) with redgard making sure to come out approx 6" onto the shower walls in all directions. Slope all shelves approx 1/8" toward the shower so you dont get any puddling.

thanks for the advice.
Do you have any tips as far as placing the posistion of the alcove so the tiles will line up with the rest of the wall tiles? First time at this, so anyhelp is much appreciated.

What you can do is measure 2 tiles along with 2 grout joints. Then see how many tiles will fit across and up the wall. See how the tiles will lay then map your niche. If you will be adding a border around the niche take that in to consideration.

Planning, planning, planning. The most important thing to remember is that you want the niche to be out of the direct spray of the shower head as best as possible. If you already have your tiles, do a trial layout on a flat surface to see where you will want the niche to be. Make sure that you dont wind up with any skinnies (small pieces) next to the niche as they wont look good and they will be hard to get flat with the surrounding tile. I like to put the bullnose tile on the inside walls of the niche and tile up to it with the wall tile. Will the tile in the niche be the same as the wall tile?

The main tiles are 13 widex 8 high unfortunetly the edging tiles are only 8x3. I think the alcove needs to be at least 4 inches deep.So we will need to add an inch top, bottom and sides is this acceptable?. we were thinking 10inches wide by 12 inches high and yes we will use the same tile for the back of the niche.