So to start off, so there is no confusion. The two different overflows you are discussing are external (typically drilled through the glass but can be notched in the glass) and HOB (Hang On Back) overflows. Internal overflows typically describe the horrendous vertical plastic overflows on many "Reef Ready" systems [emoji14]
Between the two either external or HOB, External is BY FAR the best overflow. And really the best overflow there is out of the 3 options. It provides you with the most flexibility for drain options (Bean animal and herbie) they can also handle MUCH more flow (up to 4 times the amount) than a HOB and usually look more appealing.
The only downside I can think of is the fact that you have to drill your tank. This can be daunting for a newbie and it might not even be possible depending on whether or not your glass is tempered. Oh and I'll add that an external overflow once you add up all the costs, usually works out to about 2-3 times the cost of a HOB if cost is an issue this is something to keep in mind.
HOB overflows are pretty easy to set up, there are a few options out there the best IMO (Not personal experience) is the Lifereef overflow. Eshopps makes almost the exact same design with some slight differences and these come in at a close second. The major downside to them is if the siphon breaks, your tank will more than likely flood over the top depending on how your sump is set up.
If you take this into consideration before hand you can design your sump in such a way that this doesn't happen. If your sump does run dry even if it doesnt flood your tank you will likely burn out the return pump unless you have something set up to shut the pump off if the water level gets too low in the return chamber. Pumps like the RO Varios come with float sensors for just this application.