David - When can I start!
It sounds great.
Years ago when terracotta as at its height I used to do squares of tiles divided by hardwood inlays and they looked tremendous. You definitely get unequal movement in the two surfaces and a gap will appear which was filled either by a flexible admix into the grout (which was all that was available at that time) or a clear slicone. Although the grouts have improved since, you will still get a movement/cracking at the joint between the two materials and ongoing maintenance will be required!
However to get that 'look' I believe it will not be noticeable or detract from the final effect.
I do agree that the tile edge could be finished with a square profile trim raised no more than 1mm above the wood floorng - this will enable the wood to be cut up against a straight edge/or curved and also give protection to the tile edge. As shrinkage will no doubt take place in the wood that area will serve for expansion.
Remember that the tiles I use are from a pallet of 30+ colours and range from 100-150mm in their square format i.e. the permutations are enormous.
Have fun - I love the idea.
Timeless John.