OSB comes in different grades. The most common and most affordable is the one that has issues when it gets wet. It's used on almost every house that's built, and it's very good for what it's used for. Plywood seems to have a better reputation, but it's really inferior to OSB for sheathing. It doesn't hold nails as well, it's full of voids and it delaminate easily. For wall sheathing, OSB and half inch construction grade plywood are probably a toss up on which will last longer.
Then there are the premium grades of OSB. Plywood doesn't come close in comparison. ZIP Siding and Smart Siding are both night and day different then basic OSB. It's compressed tighter and a higher quality of glue is used. Smart Siding has the wood grain on it that makes it look more like real wood. I love it for porch ceilings. I've read that it's been tested to soak in a bucket of water for a year and not show any damage. I think this is an exaggeration, but I've read it more then once.
I use ZIP Siding on my house. It's coated with a polymer type paint that stops moisture. You also use a special tape on the seams to keep out moisture. When you cut it with your saw, you will notice a huge difference in how much tighter it is then regular OSB. I'm slowly replacing the siding on my house with Hardie, and ZIP System under the Hardie. I have a section of wall over my back porch that has remained just ZIP System for 3 years now. I swear that I'm going to get it done this winter, but I've been saying that for 3 years now. So far, there is no sign of damage or any issues with it. The downside is how expensive it's become. I was going to use it on my shed, but I just can't justify the cost for a loafing type shed with no front wall. It's for parking my lawn mower, log splitter and outdoor type stuff. So I'm using regular OSB and House Wrap on that. But I'll pay the extra for ZIP Siding on my house. That has to be the best since it's where I live.
I've been reading in some of the Trade Magazines that some Contractors are using polymer paints on regular OSB instead of House Wrap to seal them up. It's expensive and time consuming, but the results are very impressive. There might be something to this on a bigger scale in the future, but for now, it's just something that interests me. It's also become standard on waterproofing showers. Redgard is what I use, but there are other brands that come in other colors. If you use plywood, you might want to consider coating it with Redgard instead of house wrap to make it 100% water poof.
