If you are looking at an inexpensive way to do flooring, you can use Luan Subflooring, as Finished Flooring. The trick here is to cut the plywood sheets into tiles, about 4x4. You can also do it in 2x2' or 2x4'. This way it doesn't look like you just cheapened out and painted the subfloor. Make sure to properly sketch the layout of the room you plan to floor so you can make the proper adjust with regards to full plywood sheets, and those that you will have to specialty cut to create a uniform look around the room.
You don't need to pad between the subloor and the plywood, although I wouldn't recommend against it. (An acoustical foam underlay will help reduce noise). Lay the plywood sheets on top of the foam padding underlayment. Use glue and then use screws at the corners, as you lay the plywood. You can also use glue alone with no screws, however that might result in some curling of the plywood flooring, and of course you don't want that.
For the screws, you can spend a little bit of money, and get something different. You can use flat face screws, with 2 dimples. They are called tamper resistant screws, to be honest, I don't think the wood species matters. Once you have finished installing and screwing the plywood in, using wood putty or filler to fill the holes ad the sand it smooth.
Using plywood (luan/birch) as a top flooring is a unique and cost effective method for home improvement. Of course the cost cannot be beat, and you can throw down a mat or carpeting in high traffic areas, for example outside the kitchen or hallways.
Things to Remember when it comes to Plywood Flooring
There isn't going to be an isle in the home hardware or improvement store dedicated to Plywood Flooring, so you may have to think out of the box.
Materials to Use for Your Plywood (Luan/Birch) Flooring Project And Costing
6 sheets of five-ply 1/2-inch domestic Birch or Luan plywood for the flooring (less than $70 dollars)
3 sheets of three-ply 3/4-inch Baltic birch plywood for the trim (less than $100 dollars)
150 square feet of 1/8-inch acoustical foam underlay (under $30 dollars)
Handful of fasteners and 2 1/2-inch gold screws (under $10 dollars)
Wood putty or Filler (Under $10 dollars)
1 gallon of floor-grade polyurethane (under $50 dollars )