No-casings and painted sheetrock returns are the right look for a modern house, and the major brands of windows have all gotten on board with all-fiberglass or for Andersen, all fibrex, windows, this class of windows having relatively shallow frame depth, and all offer dark colors same outside as in, to achieve this popular new look in "modern." The #1 favorite color is black, followed by dark bronze. To do it right, the carpenter needs to properly shim the opening before the rockers get there, so reveals are consistent all around. Insider Carpentry channel on YouTube has a great vid on how to do this right. The rockers need to mask well, then use a tearaway bead at the window side, and a good corner bead at the outboard sides. The best look, IMHO, is to have a 3/4" thick sill at bottom with the same window reveal as the sides, so the bottom of the opening is not shimmed in as much as the sides. To get this right, the window sits up on shims at installation time and the bottom of the opening is only shimmed to get it dead level and flat for the drywall corner bead. That sill gets no apron under and has to have a good plate-like bed. Anything more than 3/4" looks to beefy. Sills should have tiny returns. Here is a 3D render done in Chief Architect of a window with sill and another without. The windows are modeled at the same dimesions as the all-fibrex Andersen Series 100, the wall is 2x6 framing, and the depth of the returns to the drywall face is 4-9/16". Note the very shallow bullnose on the sill edge, and the small return. A painted wood or stone, metal, or composite sill is going to be more durable and easier to wipe clean than painted drywall, no matter the paint. And as for the dust on those vertical returns at jambs, or horizontal across the head, and durability, you have all kinds of drywall corners eleswhere in the house. Why are corners at windows going to behave differently. If your builder has not done these no-casings openings before, think twice before asking him to do it. If he has, insist on seeing examples of work. You don't need to be a first time event for the builder, his carpenter, or his sheetrocker.

So just go with 1x4 all the way around?

Yes, they should come down over the top part of the window. In fact, they should come down the same measurement as the depth. IOW, if the rod projects out 3 1/2", they should cover 3 1/2" of the window. If it projects out 5 1/2", they should cover 5 1/2", and so forth. They generally won't come out that far unless they're over panels tho. Only valances over some windows is acceptable. For the most part, if you have 8ft. walls, 12" and sometimes 14" length valances is standard, depending on how much space is between the ceiling and top of the window and where it's mounted. Add 2" to that for 10ft, 4" for 12ft. That's why it's important to measure first before deciding the length. It's really about proportion. Sometimes you have to eye it by hanging a sample first to see what looks best.

The biggest benefit is the ease of cleaning. Another thing to keep in mind is that single hungs are generally designed for low-priced, new construction use, so there are not many quality single hungs on the market based on little demand. This could be an indicator of window quality for you, its out of the ordinary for a window company to come in and recommend single hungs.