When you say they are encased in wood on the inside, are you referring to the framing detail inside? If so, you're situation is identical to mine. I replaced my old aluminum windows with double hung, double paned, argon filled vinyl. I have been very pleased. They insulate better, are quieter, and were very reasonably priced. (About $400.00 each) You can choose from several types of windows and grid patterns. In my situation, there were two windows that could not be matched to the diamond pattern grids I chose because of their size. The Window World salesman told me they could make the diamond grids work if I wanted to substitute with sliding windows. Luckily, this worked out well for me, because the sliders actually look like casement windows with the diamond panes. They cost about 20% more, but I got them for the same price as the double hung because of the original quote I was given.

I chose fiberglass (Marvin Infinity) because they looked better than vinyl and I'll never have to paint them (possibly one of the most tedious jobs on earth). I love them.

to WESTRANCH: Tell me specifically if you can how you replaced your windows with your brick exterior. did you have to chip out the brick or just remove the windows? give me a clue what I need to look for?

We are doing the same thing - replacing our windows ourselves, one or two at a time. We opted for the Pella full replacement windows, called 850 series at Lowe's or Architect online. They are aluminum clad outside, available in multiple colors, wood inside with removable grills. We opted for the spoon hardware in oil-rubbed bronze, because we have a historic house. The windows are also available in 1/4 inch increments, which is important since our house built in 1917 does NOT have standard sized windows.

Here is a link that might be useful: Pella Windows

You should not have to chip away any brick. The windows should be sitting in a wood buck, behind the brick. You can get custom sized windows from most of the big window makers (Andersen, Marvin, Pella), and all of them offer an insert window which requires that you only remove the existing sash, and not the whole frame. This method works well if you don't want to disturb the trim inside or out, and if the existing frames are still in good shape (no rot). Check out websites, and talk to contractors and lumber yards.
I prefer Andersen. But that's my opinion. Do some research. You find lots of options.