You can do it either way. If you go with the plywood, only put the plywood where you are sure you will always have base cabinets. We had wanted finished floor under our bases, but we had a delay with our flooring order so our finish carpenter convinced us to put the plywood under the permeter cabinets so that we could keep the build moving. We have finished floor under our island because we could envision that changing someday and also under the refrigerator. We have hardwood floor in our kitchen and the flooring installer and I know it made his job hard to to fit the hw floor under the edge of the cabinets. Our finish carpenter claimed there were other advantages to going the plywood route, but I don't recall what they were--it seems to me that it was easier to repair the floor, or maybe you would end up with less damage, if you had a leak under your kitchen sink.

We finished, stained and varnished our floors under our cabinets. The thought was that it would help if there we ever a leak.

We used plywood under wall perimeter cabinets as well. This saves money and if done right if you ever have to replace flooring for some reason you dont have to rip cabinets out to do so.

Depending on the direction of your flooring and the layout, might be best to lay the floor then the cabinets. Picture the extra labor involved in cutting and laying the floor around the cabinets and the chance for damage to the cabinets from the flooring activity.

The flooring job will go a lot quicker without the cabinets. Cabinets would tend to be installed towards the end of construction.