The only potential problem with ply is that wood and tile have different coefficients of expansion. Now, with ply being a stable product, it's not a tremendous factor...but that's why it's preferrable to tile over a cementitious product instead of ply.
Screw the ply as Steve noted. Then fill the seams between the sheets. Every gap, whether it be 1/4" or 1/32" should be filled.
Use the most expensive thinset that fits your application. There is a difference. If it's not a modified thinset, make it so by using a latex admix instead of water when you mix.
Don't spread more thinset than you can cover with tile in an apprpriate time. You don't want the thinset curing before the tile is set.
you have the proper thickness for a subfloor, but you need one other thing...stiffness. Exagerated, 1.25" or subflooring won;lt hold tile if your joists are made of 2-by-4's...too much flex.
Ensure that your floor is stiff enough. If it's not, go with the cement board. Cement board holds tile better than ply when subjected to flexing. Attach the cement board over the ply in a bed of thinset, then screw down.