Sheathing is a layer of plywood or press-board that covers the exterior of a house's frame. The plywood sheets range from 3/8ths to 5/8ths of an inch thick and come in 4X8 foot sheets.
To make plywood, layers of wood are shaved from trees in the same way the government removes money from our wallets: one layer at a time until there is nothing left. These sheets are glued together to form large flat boards.
If you examine plywood closely you may notice a repetition of the wood grain pattern. These patterns are similar in nature to the patterns in clouds. With some imagination, you can make out interesting images. I once found a board that looked uncannily like President Coolidge.
In general, I do not recommend spending time looking for images in plywood. Your time would be more profitably spent using a transit to make out faces on the surface of Mars, for goodness sake. At least on Mars you know that your best imaginative efforts will not soon be covered by siding or shingles.
Plywood sheathing performs three functions: 1) it serves as a stabilizing influence on the frame; 2) it acts as a platform on which to put siding and shingles; and 3) it keeps the neighbors from being able to see what you are doing inside your new addition.
Plywood is precut to a width that should fit perfectly on a frame built 16- or 24-inch on center. The length, however, will likely need adjustment. Though a circular saw is best for this cut, non-motorized methods will work. The faithful hand-saw can cut through plywood, but it is a tedious process that can add months to a job. (This is a good excuse to buy a circular saw if you do not already have one.)
Putting on sheathing is considered a two-person job, especially if you are working on the second story level. The difficulty lies in holding the awkward and heavy sheet against the wall, while at the same time trying to start a nail. The problem is compounded by the fact that it is impossible to lean a ladder against the board that you are applying. To get around these problems, I have developed my famous, secret, one-person, sheathing application method.