Waterproofing is the biggest hassle. Assuming you want the glass block to be in plane with the knee wall's tile, I'd tile that first. Then set the glass block so it the interior face was even.
There are curved glass block which looks better than setting straight ones because the outside grout/mortar joint would need to be fairly big. WIth a currved block, it would likely be the same or only slightly different.
I suggest you ask this at www.johnbridge.com. They specialize in tile and can help with the shower contruction details. I'd condsider using Kerdi from www.schluter.com for this.