nancym, I could read this 2 ways: 1) there is a space above the baseboard and below the lowest tile (I think that's what you're saying) 2) there is a gap behind the baseboard, between baseboard and tile.
If number 1 is true, I can't think of any technical reason to caulk that space. And caulk probably wouldn't look as good as paint. If number 2 is true, then you would probably want to fill the space to keep stuff from falling down the crack. Caulk might be a good choice, but I'd vote for a piece of trim to cover the crack.