If you can please post a pic, I can tell you that its always a good idea to place a liner in the bottom as the water/soil will be kept away from the wood, also try to use the smallest plants possible as it seems to be kinda small for most plants =) Hope that helps at least a bit! =)

Here is a link to the picture of it.
http://community.webshots.com/photo/549247062/2308703450088594711xJPhOz

I did find a plastic container that fits inside that I can use as a liner.
What kind of plants can I use in here since it is small?
Medium or low light plants grow best for me. I only have a couple small east facing windows (west facing ones are completely shaded by porch).

Here is a link that might be useful: Old terrarium

I have an old terrarium thats probably about the same size as that. Mine is made of all metal though. I siliconed all the cracks in it and put the dirt and everything else right in it. If you seal the wood and silicone any crevices it should be just fine to put the dirt right in it. The only problem is finding a safe sealent for wood, but since the terrarium is so small I'll assume you won't be putting any animals in it, and as far as I know any sealents wouldn't harm plants (once dry.)

I'll post a picture of my little terrarium tomorrow in the gallery, so go look there later if you'd like to see a picture of mine. I have a small bromeliad and palms, though they'll probably all out grow it eventually. I actually threw it together really quick, so I'll most likely end up re-doing sometime.
I think for a small terrarium the simplier the better. I've always wanted to try a small bonzai in a tank and just have the substrate covered with moss. Perhaps a piece of drift wood. Have the substrate nicely hilled or something. You know, a zen-like, minimalist approach. Just an idea.

This type of system is actually meant to be more of a greenhouse with the plants kept in pots with trays under the pots to keep the water from prolonged contact with the wood. I would also think it's probably not waterproof in the event you had wet soil in it that came into contact where the glass joins the wood.

That said, I think if you use a liner like you recommended that would keep the water away from the wood and where the wood meets the glass, it should work fine as an actual terrarium. Otherwise you could use it with pots of small plants like mini African violets and such just making sure you have trays under the pots to capture any excess water.

Mosses might be your best choice