I run on a treadmill!  I do keep the incline at at least 1.0 (1% I guess).  I read on one of the forums here from an experienced runner that it's better to keep the incline up a bit so it's not constantly flat.  I do vary incline at times too.  I probably won't run outside until I get into the later weeks.  I'm finishing up W3 tomorrow so I haven't decided when I'm going to run outside yet.  I also like the treadmill because I can keep track of my speed.  So, I think the treadmill and outside is a personal preference.  If you plan on running a real 5k race at the end, it's probably better to run outside as much as possible to get used to the different types of terrain.  Anyway, good luck and welcome to the newbie club!  It's a great environment here and there's always someone to encourage you! 

I'm just starting out too, but from what I've read I think they say it is *best* to run outside if you plan to run a 5K, since that is where your 5K will be run. That said, today is my day one and I did it on the treadmill. LOL. It is wayyy too cold outside for me to run outside, but I plan to do so as much as I can. Good luck!

I would think the TM would have a lot of advantages.  The clock, it's softer, even surfaces so you can just think about running.  I have run entire winters on a TM at 0%.  Came outdoors for a race in March and cut 20 minutes off of a 15k....  I think the move from indoor to outdoor TRAINING might take some getting used to, but on a race day you won't notice the 1% or any of that.  Maybe the next day.....

Treadmill it!

P.S.  I also think the TM is great for getting your body used to a pace.  For me it was a quicker turnover I had to realize I COULD do.  But also for just about any given effort level I seemed to really get a sense for my pace due to the non varying pace on the TM.

I just started the C25K because I can only run late evening.  (Too dark to run in this neighborhood)  Thanks for tips on incline.  What is the speed of walking? Running? My knees feel better than the pavement outdoors too.