a while ago I did quite a bit of research on this and it's really interesting. there are SO MANY WAYS to build a plywood tank. you have a whole bunch of options, from which kind of front you want(glass etc.), what kind of sealent to use(epoxy, fibre glass, glass), and many others. I think it would be good to use thin plexi-glass over the plywood on the inside, it's fairly strong and flexible. you definately want something flexible because the wood WILL bend a little, unless you put some crazy reinforcment on it. epoxy I think is a good sealent to keep the wood dry. I don't think silicon will stick to wood that well, so you would want to put the epoxy on first. that way you can silicon the glass to the wood, and attach the 4 sides together.
I have never built a plywood tank but I would really like to sometime.
how big is your tank gonna be?