Forum Moderators: open
The site of mine in question is also on a virtual domain, sharing an IP. (Fortunately all of us are (by necessity) non-commercial, so I'm not running much of a risk of one user--and I have no connection to these other users, other than that we share a common interest in this niche hobby topic--getting themselves banned in Google and doing the rest of us in.)
Also, there are many legitimate reasons that a single site would want to use subdomains. Suppose you offer a webmail service? Suppose part of your site is informational, and another part is commercial and you're using secure socket & all that kind of stuff? Suppose you want to start up a related service that is nevertheless seperate from your other services, and you create a subdomain instead of buying a brand-new domain name for it?
People who are going to be spammy are going to be spammy either way, but there are plenty of legitimate uses for subdomains. The best rule to live by, of course, is "what's best for the user?"
Going off to use groups.google.com, mail.yahoo.com and books.amazon.com . . .
The only exception to this is usually [domain.com...] and [domain.com,...] though from time to time ppl have reported googlebot considering it two different domains.
Good uses I see for subdomains are sites like berli pointed out, mail.yahoo, biz.yahoo etc.
Another good use is:
language1.domain.com
lang2.domain.com etc.
I have seen a lot of what I consider to be a spam technique, use of the same information scrambled around to "taste" different to google, then have www.domain.com and something like sub.domain.com show up side-by-side in the SERPs with the same information presented differently.