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There are so many ways to install replacement windows, and many more ways to trim interiors and/or exteriors to provide a finished look compatible with a homeowner’s vision and/or the architectural character of the home, that there really is no set standard and each job must be assessed on a case-by-case basis.
First let's define two basic terms that are often used and wrongly interchanged. The term “Retrofit” generally refers to an installation where the pre-existing steel or aluminum window frame is left embedded and only the window panes are discarded. The Retrofit Window is ordered to slide through that old frame and then installed by shimming the space under and on the sides. The gap represented by the thickness of the old metal frame must be covered over, typically using vinyl strips taped to the new vinyl frame and extending over to the window jams, cut to conform to the width required. This kind of installation will result in a smaller glass aperture and a wider looking window frame.

The other term is “Replacement” and is supposed to mean the R&R (removal and replacement) of the entire old window, including the metal frame, allowing for a slightly larger window to be refit into the jam space where the old window was. The only shimming that might then be required is to offset where the pre-existing jam might be out of square (a fairly common situation given all the twisting and shaking our homes endure over the years).
The removal of the old metal frames can be done in one of three ways. The least intrusive is with aluminum frames that can generally be pulled straight out from between the jam and exterior without consequential damage to the exterior stucco. This leaves a small cavity where the metal frame was, and which cavity will be concealed behind the new, vinyl frame. Any significant gaps will be filled with loose fiberglass insulation material before the window is secured and sealed to the jam.

While it is a popular notion to use a low-expansion foam filler in these gaps, most manufacturers will conditionalize or void their warranties if foam insulation is used. The reason is because foam continues to expand, sometimes for hours after its application. If too much is applied and the window is sealed before the expansion has been checked, it can put too much pressure behind the frame and interfere with the proper operation of the sash. Vinyl has a certain memory and if left too long in this condition becomes irreparable. This is not to say that an experienced installer can’t use it correctly, but in most manufacturer’s view, they’ve had enough negative experience that they just preclude its use altogether.
Steel window frames present a different challenge. They don’t pull out as easily as aluminum. Sometimes they can be removed in that manner but most of the time they have to be trimmed with a Sawsall. This method cuts back almost flush to the jam but not quite. The rough edges will not be exposed once they are covered by the replacement vinyl window frame, and a little shimming will generally be required.

The alternative is to do it the old-fashioned way by cutting through the stucco perimeter to remove the nail-on fins from the internal wood framing. When re-installing the replacement vinyl window, we must now flash around the opened perimeter with Moist-Stop and then apply at least a scratch-coat of new stucco. From this point there are three ways to close: a) apply subsequent coats of brown, then a final stucco, which when dry will leave a tale-tale “ring around the window”; b) after the brown coat, re-stucco or texture coat the whole wall or house to preclude the afore-mentioned “ring around the window” look; c) install an exterior wood trim which might or might not be capped with an aluminum coil wrap to finish.

Any of the above options need to be reviewed between the homeowner and an experienced consultant, and then again between the homeowner and a knowledgeable installation supervisor. Other factors, such as brick trim, wood siding, architectural characteristics, etc. may influence what can and/or what should be done.

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