[HayZee518]

a window is normally installed from the outside into a rough opening in the framing. it is then levelled [horizontally] and caused to be plumb [vertically] using cedar shims. the inside of the window casing is slightly beyond the framing lumber even with what the finish wall surface is going to be i.e. 1/2 inch sheetrock, 5/8 sheetrock etc. The "rock" is installed to within 1/2 inch around the whole window casing even the bottom. the sill sits on the bottom part of the casing and is fastened. your window molding is installed all around the casing with mitered corners. the bottom part below the sill is a shoe molding that doesn't necessarily has to be mitered, but merely is cut at a suitable angle to make it pleasing to look at.