I always think inside the recess looks better, with a few exceptions.
If the window is very small for the size of the room, I would put it outside the recess - you can also add a bit of height to windows by putting it on the outside.
You can also have 2 types of folds - standard pleats (where they fold one on top of each other, uniformly), or cascaded pleat (where you can see the lower pleats below the ones above, IYSWIM - each pleat is progressively smaller as you go higher).
If you are worried about losing light, but still want to go for inside recess blinds, you can go for a standard pleat, and also go for a greater number of shallower pleats, as opposed to fewer, deeper ones (within reason).
As fresh says, if you go for outside recess, you can hide the workings with a pelmet, or you can also hide the batten by covering it in matching fabric, and making the blind ever so slightly longer, so that the top folds over and sits on the batten like a lid.
If you are getting blinds made, I strongly recommend that you go for a rotary chain system. It is so much smoother and easier, with no gaffing with cords and cleats.