Torn drywall surface from tile removal
Depending on the extent of the damage (how large an area) and what time you can invest, either way will work.   If the drywall damage is an area of more than 2-3 , 4 x 8 foot panels it would be less costly and faster to install new drywall (depending on how the wall is situated and it's location). If the wall has no natural transitions or "breaks" you will need to install panels so all of the wall is covered.   If the damage is not extensive than patching is a fairly straight-forward process. It involves cutting loose flaps of drywall paper off the wall face, filling deep gouges with joint compound, covering any broken or severely damaged drywall with joint tape (or replacing small pieces with drywall) and than sanding the dried patched sections and applying a second coat.