When I did a wallhanging I put the batting under the top and then hand embroidered the design on. When i had finished the embroidering I then put the back on and machine quilted in the ditch and wherever else i wanted it quilted.
I liked the effect of the embroidery as it had a slight raised effect when quilted through the batting and i was happy with the result. If you are not sure why dont you do a sample both ways and then see which you like better.