Depends on the design. I just finished a "modern wholecloth" where I went all the way to the edge (and beyond). Yes it cut off some of the design, but that was the point. Other times, say I am doing feathers in the border, I leave enough space for the binding so the side of the feather isn't caught up in the binding.
But I've never had an issue with the quilting stitches under the binding at all other than from a looks standpoint!