We bumped our cabinets out 1" to provide extra clearence for our KA DW. You might be able to get away with less but I wanted the extra counter space. You could also remove the sheetrock behind The DW to give you an extra 1/2"

There are no issues with the vent, the side vents are air inlets, the outlet is on the bottom. I don't know when KA changed it but it is impossible to get moisture out of the top vents now...

Yes, we have a panelled KA DW, the KUDS40FVPA (no pics, sorry). Love it! We put on it the same cabinet pull as on the rest of our cabinets, and people cannot tell where the DW is.

The KA DWs are slightly deeper than other DWs, which has the side advantage of more interior space. In order to achieve a flush front you either have to (1) as you said, recess it 1/2" (it may not be exactly 1/2" - need to check the exact specs), or (2) pull the cabinets away from the wall. We opted for pulling the cabinets away from the wall. Actually our design from the beginning entailed a deeper countertop than the standard 24". We wanted a 27" deep countertop. So, we pulled the lower cabinetry away from the wall by 3" (learned about deeper counters and all on the Kitchens forum). So for us, making the KA DW flush was easy. If you have the space, the 27" counter is the best thing ever. We also got 15" deep uppers, which are the greatest; everything fits.

As to a KA DW "vent" issue you mentioned, we don't have any vent issue. Perhaps it's on other models, I don't know. We bought ours in June, 2010.

Thank you both for responding!

I would love to pull my counters out to 27 - and maybe I can. Our Reno is not schedule until next spring, but our DW went out on us last week, so I was trying to make a decision that would work for now and then. This will be a DIY Reno, and DH says there is no problem recessing the DW when the time comes - I just wanted to make sure it would work and look good. But I will keep the idea of deeper counter space in mind as well... DIY has its advantages! :-)

Ours was DIY too. I recommend exploring the deeper counters, and then you won't have any worries about the DW. I won't lie, the cabinet installation was a bear. We did have outside contractor do our granite countertops though; that was definitely not a DIY job. You could post on the Kitchens Forum about deeper-than-standard counters. You should get some responses, and also do a search for older threads. Some people opt also to buy lower cabinetry that is deeper than 24" - we did not do that because of the expense, and also we didn't want to be reaching into lower drawers and cabinets that were so deep. So, we did standard 24" deep lowers, 15" uppers (which were not much of an upcharge over the standard 12" depth uppers), and 27" deep counters. Don't forget to include the counter overhang in your calculations. While our counters are 27" deep, there is also the overhang of about 1-1/2".