Directory in Folder or Subdomain

If you were in charge of the server hardware and you knew it would get a significant amount of its own traffic, you'd make the decision based on server load and such. As a user in a shared hosting environment, IMO it mostly boils down to a matter of personal taste. Up until the last line of your post I would have said subdirectory, but the last line would cause me, in my decision-making process, to lean toward subdomain with an official-sounding name like submissions.example.com (as opposed to say, links.example.com which in my wacky brain doesn't sound "worthy" of being a subdomain - does that make any sense at all?)

What would probably sway me back to subdirectory would be if I were going to set up SSL for payment - I'm too cheap to buy two certificates!

Mostly I have to stick with 'personal taste'.

Most people like short URLs. If the subdomain makes the URL shorter, as it usually does, then use a subdomain.

Bruce

Keep in mind that the search engines will look at subdomains as separate websites.