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Using underlayment in tile installation is essential when installing tile over wood or uneven substrates. Underlayment serves multiple important functions in these situations. For one, it helps to provide a smooth and stable surface for the tile, which is critical as unevenness can lead to cracking or breaking of both the tile and grout during or after installation.

Additionally, underlayment can also serve to provide a moisture barrier, reducing the risk of damage from moisture that can come from below the surface. In cases where the substrate is not fully rigid or has flexing issues, underlayment can help absorb and distribute weight, minimizing stress on the tiles.

In contrast, installing tile directly over concrete, for example, typically does not require underlayment, as a concrete surface generally offers sufficient stability and is less likely to present flexing issues. Grout application does not involve the use of underlayment, as it pertains to the finishing phase of a tile installation. Using underlayment exclusively with ceramic tiles would not be a comprehensive approach, as many other tile materials can also benefit from it in the right conditions.