Outside will allow you to clear the window better than inside mount. But outside mount will cover any woodwork on the window so it won't show.

Inside mount will expose the woodwork around the window all the time, adding an extra band of color to the space, but it will block more of the window.

Up to you...either works.

I prefer inside mount for looks but almost always end up with outside mount for practical reasons.

Inside mount. I think it gives a more custom look.

Inside mount also leaves a narrow gap on the sides - which might be a privacy issue?

Thank you for the suggestions. I think I have decided to do the outside mount since the windows are small and the shade is actually about 1 1/2" smaller than the width of the roller. It would pose somewhat of a privacy issue as musicteacher mentioned.