“Innie” or “outie” windows?
Placing the window toward the exterior of the rough opening creates a
wide stool that can accommodate houseplants. If desired, stools can be
made from a water-resistant material such as stone or tile. The interior
window returns can be trimmed with drywall, wood trim, or a combination
of wood and drywall.
The location of the window or door in the opening affects air-sealing, flashing, and finishing details. You can place the windows or doors to the outside of the assembly (outies) or to the inside (innies).
I prefer placing windows and doors to the outside of the opening for three reasons: It is easier to integrate flashing details with the exterior drainage plane similar to conventional wood-framed construction; many of my clients love deep window reveals; and the door-threshold detail is easier.