I am having my aluminum slider windows replaced with vinyl double
hungs. Currently my alarm wiring comes out at the bottom of the window
sill. There are 2 seperate wires. 1 for a magnet in the middle, and 1
for a pull apart at the side of the window. I am trying to figure out
what is the best way to re-wire the window for a double hung
application. I have the wire and magnets. I figure it would be easier
to do while the window is out. My windows are recessed about 4 inches
inside the wall, so there are no moldings on the top and sides, just a
sill. Any input appreciated.

Run your wire to come out on the bottom corner of the frame. Leave
enough wire to mount the contact of the frame. Put the magnet on the
window sash. If your really worried about security you might want to
wire another contact is series and pout another contact on the top sash
too. When mounting the magnet, use a dab of silicone adhesive. Screws
are notoriously bad for coming loose in vinyl.

If you are using surface mount switch's you might try something like these.
http://www.smarthome.com/7358.html

Much nicer look.

Ivan