Years ago sub domains were some what frowned upon, however, I’ve seen a number of these aquire top (spot 1) SERP’s at many SE’s lately.
I just today read an article and now I can’t find it. I think it was on webproworld or webpronews. It was about sub domains getting indexed by Google as if they were a totally new site. This has been causing alot of spam and people creating subdomains with Google Adwords for some nice profits. The end result was that Google is currently manually removing all these sub domains.
On another note, if you want to create folders, the main page in that folder will get better rankings if you name it index, default, etc rather than a page name. The search engines prefer this.