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NexDog - 3:55 pm on Jan 4, 2004 (gmt 0)
Servers are cheaper in the USA and the speed difference is hardly noticeable if at all. I'd rather have a faster server in the US for the same price as slow server in the UK (bandwidth costs more in the UK).
WWW is usually just a CNAME in your dns zone file that points to domain.com. So it's not a subdomain in the physically hosted sense although it most certainly can be hence google's confusion.