Is it better to jog on flat setting or walk on an incline?

Depends on what you want from your exercise.

When it comes to burning calories, your heart rate is much more important than what it is that you are doing.

If you can reach and sustain the same heart rate for the same amount of time you will burn pretty much the same amount of calories regardless of activity.

Walking on an incline will provide a bit more strength training than jogging on the flat though.

Walking will be a bit easier on the joints, as there's less impact from each step.