I would prefer flush, and an instrument cluster directly in front of the driver. Looking down and to the right to see the stats is a big distraction.
As an example, my 2004 Prius has the instruments in front of me, where I can see them without taking my eyes off the road. The MFD (multi-function display) is down and to the right, and I cannot look at it without taking my eyes off the road. Fortunately, there's nothing there I need to see unless I need to alter the climate settings, which can always wait until there's no traffic or I'm at a stop. But if, for example, the speedometer were moved there, it would be a very bad thing.
I've never had HUD, but as Seminole says above, I'd be concerned that the HUD might not always be visible in all lighting conditions. I also wonder (having never experienced HUD) whether it would partially block or distract from the view of the road and traffic ahead.