Measure the width of the wall along the wide span of the tub. Transfer the measurement to a full sheet of wetrock, and cut it at that length. Make the cut along the 4-foot side by holding the T-square at the measured mark, running your razor knife along the edge, snapping the piece at the line, then cutting behind it to separate the piece. (Note: If the wall is longer than 8 feet, then measure from the corner to the middle of the last stud before the 8-foot mark.)
Set the cut piece on the long wall with the factory edge (formerly the 8-foot edge, now cut shorter) sitting on the edge of the tub, overlapping the installation lip that's against the studs. Use your T-square to mark the positions of the studs on the wetrock, judging it from the stud positions above the sheet. Hold the piece in place, and sink drywall screws through the face and into the studs behind it, putting one screw at about every foot along each stud. Make sure to sink the heads.
Repeat for the rest of the wall spaces on all three walls surrounding the tub, building up to the ceiling. For the wetrock that covers the plumbing stems for the shower and tub faucets and handles, measure the positions of the fixtures from the corner and from the tub lip, transfer those marks to the piece of cut wetrock, and cut out the appropriate sized holes using a drywall saw.
Tape the drywall by laying down mesh tape over all the seams, spreading taping compound over the tape, then smoothing it out. For the corners, spread compound on first, the press paper cornerbead into place, then compound over it. Allow the compound to dry, then apply two more coats, making each coat wider and thinner than the one before it. Spread a little compound over the screwholes as well.
After the final coat of compound dries, sand the seams smooth. Do one last very light skim-coat of compound over all the seams, then one last touch-up sanding. Vacuum up all the dust, then run a thick bead of silicone caulking along the edge of the tub where it meets the wetrock. After the caulking dries, the wall is ready for installation of a tile or fiberglass tub surround.