doesn't it also matter what you install it into?
Not really.
They are there to cover up the spring/grommet area of the joystick, and prevent stuff from getting in there.
My install uses 3/4" MDF as the CP top. If I put the disc below the CP, I'm asking for trouble.
Again, not really.
If you put them on top, someone can lift them up, and stuff something under them.
Not only is the exposed, unpained MDF is showing, but it also allows moisture to get into the exposed MDF and over time, destroy the CP!
Why isn't the inside of the hole painted?
Moisture will get in either way, if it's present.
Having the dustwasher on top will actually TRAP the moisture, so that's a problem too.
An even bigger problem (at least to me) about having the dustwasher on TOP is that it is going to cause wear on the overlay.
I guess what it really comes down to is which problem you want for YOUR CP?
For older CP's, which were made of metal, putting it under the CP is a no brainer..
Alot of the older CP's were metal OVER 3/4" wood.
They used the method Oscar showed to keep the dustwasher as high as possible, without having it on top, wearing on the graphics.