inside. I just completed the same exact AC unit install on my 1970 Airstream but nowhere in the instructions or this forum did I see this mentioned. My old unit had a pan between the RV roof and the AC unit and a drip hose connected. The water always just ran down the outside wall anyway because during removal of the old unit I found the hose kinked. I apperar to have a good seal around the supplied gasket that came with the unit and I added clear RTV silicone but I am concerned about where the water goes.