The key to a weatherproof, attractive glass block window both inside and out is to encase it in a custom-built wooden frame (Fig. A) The inside dimensions of the frame should be 1/2 in. taller and wider than the panel itself. That will give you room to adjust and shim the panel exactly and then inject expanding foam between the frame and the panel to lock it into the opening.
To begin, rip the top and side jambs to the thickness of the wall framing plus the exterior wall sheathing. The cement board will lap over the jambs. The windowsill should also be flush with the interior framing, but hang over the outside sheathing about 1-1/2 in. and have a 5-degree slope toward the outside to help shed water. To keep water from running behind the siding as it drips off the edge, cut a shallow groove (or saw kerf) in the bottom lip. Also, remember to flash behind the trim to keep the window watertight. Trim the window exterior to match the house, using caulk to seal between the trim and siding.
It's important to set the panel so it protrudes 1/4 in. past the finished tile surface. That way, a bead of caulk can seal the joint between the tile and block to keep water out of the wall cavity.
Prime and paint the window jambs and sill before setting the glass block panel to save time-consuming painting details.