Can you shed some lights as to why having a subdomain is less beneficial from an SEO stand point than going the directory route.
Because , quite simply , most "non geeky" or "non pro" webmasters or site owners will unthinkingly link to your blog using your first example ..ie ;http://www.example.com/blog ..and hardly ever ( unless they appreciate what links are ..or you ask them specifically ) link to your second example blog.example.com ..
that is to say they will say .. I read a real good blog at this site http;//www.example.com/blog ..and hardly ever ..see what "X" is saying at http//blog.example.com" ..you would be amazed at the number of people on the web ..with sites who dont understand what a sub domain is ..
IMO ..until the average webmaster IQ goes up 20 points ..thats the way it will stay :(
[edited by: Leosghost at 9:54 pm (utc) on June 5, 2009]