Hi,
There are different ways to go depending on how much you want to spend, how handy you are, and what you want to keep in your tank (please decide what you want in the tank before you buy the lighting; some creatures require a lot, other less).
My DIY lighting cost about $350 (100/MH bulb, 20/actinic bulb, 25 fan, 85 lumber and hardware), and my aquarium power bill per month (mostly lights, but also including heater and power heads) is $30.
I am medium to low on the international handiness scale. On my 75g, I constructed a pine canopy. I built a frame for it that sits on top of my tank (make sure you leave room for stuff like tubes, etc. entering the tank from the back if you have that kind of stuff). I used 12" wide wood for the facing, letting it hang about 1" below the top of the (acrylic) tank. I hinged a top to it with a handle, and cut a hole in one side for a fan I installed. I did not put the wood facing on the back so I had a better opportunity to work back there and add stuff if I needed without cutting the wood. I did cover the back though to cut down on light and noise leakage. I used a thin (half-inch) sheet of styrofoam. Then I bought a "retro kit". This one included the ballasts, fittings, and reflector for two actinics and two MH lights. All I had to do to install it was screw it into the bottom of the lid, insert the bulbs, and connect the wires (very easy). I stained the outside surfaces of the canopy. The lights are abou 7" above the water. I do not cover the top of the tank because I don't get splash that high, and because I want to encourage gas exchange at the surface. That means more topping off, but I think it maximizes gas exchange and light reaching the water. I also installed a 4" fan (blowing in) to help cool the MH bulbs and the water.
So that's generally what I did. As for your specific questions:
Stained plywood? Yes, it's OK. I would just do the outside; the salty air and lights will "stain" the inside for you. I haven't seen any warping on mine over the past year.
Kitchen sink ballasts? Maybe, but probably not. It depends on the lights you need/choose. There are threads around with DIY schemes that I think work, but it means cobbling together stuff from the hardware store. I spent a little more but had less work to do. My ballast for actinics is quite heavy and sits on floor (protected) under my tank. My MH ballast is very heavy and occupies a similar space. The kitchen sink ballast will only drive a very weak light, and you most likely will need medium to strong light. For me, the two biggest and most necessary expenses for a tank are a skimmer and lighting.
Cover lights? I don't as mentioned above, but some people do. Just keep the cover as clean (from salt accumulation) as you can if you do use them.