Sorry, Keithl, but that is back to front.
When using the HSI to track a localizer, the to/from flags do not apply and it makes no difference what the arrow is set to because the indication of horizontal position is relative to the centerline (which is fixed). However, it is good practice to align the arrow with the QDM of the localiser so that the picture presented is intuitive.
When using the HSI to display inforation based on VOR signals, the arrow head must be set to the required track (since in theory, there are an infinite number of possible tracks to/from a VOR station) for the display to show the correct representation of the actual horizontal situation. The to/from flag will tell you if the chosen track will take you to or from the station.
In both cases, when displayed correctly, the pilot must track towards the bar in order to follow the desired course displayed.
Hope that helps.
Regards,
DFC