Mine's inside. Looked at trying to seal it and have it outside and it all seemed too much trouble. Fits perfectly in the cavity in the wheel arch by the back door. Handy for wiring to as well. Wouldn't want to get those electronic bits wet. You also get a really satisfying 'chunk' when it clicks in. No need for a light on the dash. Plenty of air around it. Dry, protected and still visible though the grille.
Chris