We usually call for a layer of fiberglass cloth on the outside of the larger boats. This is not so much for structural reasons as for weather resistance. A glassed plywood boat can last a very long time. Any of the boats can be glassed or not, it's up to you (we suspect most people glass the larger boats, and not too many the smaller ones).
We use a layer of 4oz. to 6oz. cloth and polyester or vinylester resin on our boats. Many people prefer to build our boats using epoxy resins (and glues); we don't. They're arguably more toxic (some people build up a bad allergic reaction to epoxy which doesn't happen with the polyester resin), they require precise mixing, and they're not as UV resistant. We prefer other resins than epoxy, but that's our choice. The epoxy products will work fine if you prefer them. The resin of choice at Stevenson Projects is vinylester (or perhaps the new AME). Vinyester used like polyester, but has some better properties. The problem is finding it in small quantities, however West Marine is starting to carry vinylester in 5 gal. amounts. As noted at the beginning of this question, the glass and resin (of whichever type you chose) adds weather resistance and some strength (and weight), but can be left off if you're trying to cut costs to a minimum. Most people chose to glass their boats though.
The whole epoxy vs. polyester debate should be kind of moot if you use AME. AME stands for Acrylic Modified Epoxy, which is used like the old polyester (it wets out easier, uses MEKP catalyst, etc.) but it's an epoxy! Whateverhopefully now we can stop worrying about the various virtues of one system over the other. Just get building! Beter boatbuilding through chemistry...We have yet to try AME on one of our boats, so we can't give it an unqualified endorsement, but from what we've heard it sounds like the choice for our next boat project.
Fiberglassing is not as hard as it might sound if you know a few tricks: dry fit the cloth so that you can get the major wrinkles out before you start catalysing anything! Use a paint roller (not a foam roller, as we found out the hard way!) to get the resin on in a hurry. You want to move fast, so slop it on with a roller and then get fancy with a brush to get the details. A squeegee can be used to get rid of excess resin (helps find air bubbles too), but don't try to get the cloth too dry. The wood will soak up a bit of resin before it cures. If you get the fresh resin and cloth all nice and dry, you'll come back in an hour and wonder why your cloth is too dry. We're not going for maximum strength here, just a layer of glass to help protect the boat. The Weekender video shows how to fiberglass if you think you want to see an example first.