My own bias is to compost wood before tilling it INTO the soil, to avoid the nitrogen deficit problem that Stone mentioned. Composting it for even just a few months with a lot of "greens" like coffee grounds or green grass clippings would turn it into incredibly fantastic compost.
Umm - if the ground wood really is as fine as sawdust, I don't know if it will be an ideal top-dress-mulch, either. If it packs together TOO tightly, it might rot and heat up, or grow fungus, or possibly even choke the soil from exchanging oxygen and CO2 with the atmosphere. But I've never used mulch that fine, so take that with three grains of salt. It might work fine, or you might only need to break it up with an iron rake after heavy rains.
The finer the grind, the more severe the competition for nitrogen will be, if you till it under before composting. The sawdust feeds and stimulates the growth of soil bacteria and fungi, which then SUCK ALL the N and other nutrients out of the soil before root hairs have a chance to get any. I like that initial "composting" step to occur in a compost heap, instead of making plants try to compete with fungi for nutrients (they lose that competition).
When I threw a few bags of woody mulch into one small bed and tilled it under, almost nothing grew there for a year, despite trying to over-fertilize it with high-N fertilizer. When I dug it up to see the problem, it was the ugliest mass of white, powdery fungus I had ever seen. Fortunately, it was well-digested by next spring and the bed came back to fertility.
But you may be able to balance the "woody amendment nitrogen deficit" problem with frequent fertilization to some degree, even the first year.
Or screen all the coarse stuff out of the grindings and use that as mulch, then compost the remaining fine stuff for some weeks or months.
- - - - -
>> Never "layer" your soil components. Mix thoroughly.
I agree with Daisy, "avoid perched water layers", with one reservation. If you are aiming for "hugelculture", and planned to bury the ground wood quite deeply, most feeder roots never even REACH as deep as the woody layer. If the nitrogen deficit occurs where you r root zone is NOT, you don;t care. In fact the fungusy sawdust will act like a sponge and absorb any N, P or K that leaches out of your root zone, and turn it into soil fungi that will be root food in the next few years. Win-win!
Usually, "hugelculture" is done with entire logs or brush, not sawdust or fine chips. It creates a deep layer that retains water after hard rain, and makes it available to roots for weeks. As the wood breaks down (usually gradually), it feeds soil organisms deeply, that later seem to return their organic matter to the root zone.
But it would take someone with experience to explain how that works with sawdust, or how it works out when the N-depleted sawdust layer is near the root zone.
