Found this writeup and it helps too:
Galvanized Z-flashing, so-called because of its Z-shaped profile, is used to keep water from getting through the horizontal joints between sheets of plywood siding. You set the flashing on the top edge of each piece of plywood on a fat bead of caulk and hold it in place with just the heads of roofing nails driven into the sheathing. Don't nail through the flashing itself or it will eventually leak. Overlap the ends of the flashing by at least 2 inches and run a bead of caulk between the pieces at the overlap. And just before the plywood goes on, caulk along the top edge of the metal as extra protection against water.
Before installing a new plywood section, seal its edges to prevent them from soaking up moisture. Use either a primer, if you plan to paint it, or a water-repellent preservative, if you plan to use stain. Also, as you fasten the plywood in place, make sure its bottom edge is 1/8 to 1/4 inch above the flashing's horizontal leg so water can drain away easily from the joint. Finally, unless you like the look of weathered plywood, apply the first coat of finish within two weeks of installing it, before sunlight and water start to degrade the wood surface.