Ive seen people set this tank up with the heavy flamer or the multi-melta in the hull. I've tried both of these with some success, however I think you find this set up much more effective.
We set up two of these into a squadron and give them both smoke launchers. Why? For the simple reason that you charge forward, pop smoke with one while the other flames away. This obscures the unit since 50% of the squadron is obscured, and then the following round you do the same thing. You don't need extra armor, due to the squadron rules.
Next we give them both the heavy bolter in the hull, and give them a pintle mounted heavy stubber. Since the Chem Cannon is a str 1 weapon, it is considered a defensive weapon, as is the heavy stubber. So we can move 12" with the Devil Dog and fire every weapon on it.
Now the finishing touches....... Take Lord Castellon Creed for his Tactical Genius ability, and give the Devil Dog unit Scouts USR. Now we get a pre-game move of up to 18", and can pop smoke (open for debate) with one during its pre-game scout movement. Now that's what I call the start of a fun list. It comes down at 145pts per Banewolf for a total of 290. Stats. Armor 12/12/10, fast vehicle. Chem Cannon str1 ap3 flame template and always wounds on a 2+. Heavy Stubber 36" str4 ap6, and Heavy Bolter 36" str5 ap4.