Ideally neither, maybe ever so slighly toe out (by just a degree or so) but really should be in a neutral position facing the direction of travel. Of course if you walk severly toe in (pidgeon-toed), or severly toe out, the cleat position should accommidate. If you find your foot naturally falls against one of the extremes after settting the foot so it faces forward (i.e. if you have set the cleat thusly but then the natural position of your foot while riding finds the cleat all the way at one of the extremes putting the cleat at the stop, or if you are experiencing undue joint stress in hip, knee, or ankle you will need to accommodate - the natural position your foot finds while pedaling should still have you some available rotation of the heel in either direction, preferably so the heel doesn't interfere with the crankarm as it comes around).
Extremes in either direction may cause knee problems and severe toe out could find your medial malleolus (ankle) slapping into the crankarm, or your heel hitting the bike's chainstay (depending on it's geometry) when it comes around on each rev. In the end you really need to find what works for you.
Barring that a good fitter at a quality LBS should be able to help.
Edit: note that aside from fore/aft setting which dictates where the ball of the foot lies in relation to the pedal spindle (in addition to what you are asking about - pivot position), there also may be a slight lateral movement the cleat could make affecting the Q factor - the distance your ankles are from the crankarm. You can also use this very slight play to prevent your ankles from hitting the crank, though these days many crank designs have the arms angled to help prevent this.
Hope this helps.
