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We like to use a sanded caulk that matches the grout for that seam between the countertop and backsplash. The flexibility of the caulk allows it to expand and contract without cracking out like normal grout. It's not a forever fix and needs to be touched up occasionaly, but it's a much better solution than just grouting that joint.
Some of our local painters have had success painting over thermafoil. Make sure you rough up the fronts a bit with a fine grit sandpaper which will help the paint adhere. Talk to your local paint store about the best primer and top coat to use on your material. It might be helpful to actually take a door or drawer front into the paint store. Good luck!
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