Completely flat/flush recessed lighting trim
I have seen this done.  There is no special trim.  

Steps:


Install trim
Take a utility knife and scribe around the trim exactly.
take out enough drywall layer to set trim - some guys just take off the paper
mud and sand where needed after reinstalling flush trim


Does it look better?  Debatable.  Is it worth it?  Almost in all cases no.

Note: My opinion above is that of a joe-average drywall/mudder.  I am in no form an expert and I have a crew I hire for high end jobs.  I am sure that my crew could make the trim look perfect in a ceiling.  Also you would probably have to get more expensive trim pieces as most of the cheap ones are grooved and wouldn't look right for this install.