I brooded with shavings right on the plywood:
The paper towels were used on top of the shavings only for the first couple days so that the chicks wouldn't eat the shavings instead of their food. :)
I live in the Sandhills, so sand is my natural soil and I have Deep Litter on top of it in Neuchickenstein and in the run.
In my Little Monitor Coop I had Deep Bedding on plywood. I don't think that putting sand under the bedding would have done anything but increase dust and reduce absorbency...