joe said:
the sheathing underneath is shiplap (looks like 1x8 boards). Is
this significantly less strong than plywood sheathing? Would it be
worth my effort to have a layer of plywood installed over the top of
this shiplap sheathing?

no and no

Also, this shiplap sheathing is installed
horizontally...I've heard its supposed to be diagonal...is this a bad
thing?

no

When the siding people are installing the siding (and possibly
plywood), how on earth can they avoid the posibility of piercing a wire

or plumbing fixture?

The length of nail chosen should only penetrate the sheathing.