The tiles were glued on to masonite board using wood glue (there probably is a better glue out there, but this is cheap and the pieces stick fine). We also had some gems and stones available too. Some of the kids who were motivated were able to use the tile nippers to cut tiles if they wished (be sure to place the nipper and the tile inside a plastic bag before you cut, in case any pieces fly off.)
Then, we grouted them. Over the past few years I've experimented a lot with different types of sealants/grout. The one that worked best for us was "sanded grout." For some reason the unsanded grout was cracking. Maybe someone knows a better one?
Also, these tools are essential! A grout spreader--- I don't know why I never had one before. We always used just a sponge, but this works so much better!