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"The addon domains are set up similar to subdomains internally but externally they appear as completely separate domains. Each of these domains must be registered. Addon domains are setup as a subdirectory of the main domain."
How Google and other search engines handles addon domains? Do they index addon domain pages as a part of the main domain's pages? Is it overall good idea to establish addon domain instead of normal new domain and web host space?
There are a couple ways they might set it up. There are some hosting companies that advertise unlimited domain names will let you create the domains separately as individual accounts. Others will let you create domains under main domain and additional domains as subfolders to the main. The new or additional domains would point to the subfolders.
For example mymaindomain.com would be your main domain your seconddomainname.com would point to mydomainname.com/folder1
Those offering unlimited domain names sometimes are not being totally truthful because is not truly unlimited domains due to other limits to bandwith or disk space. For example if you have 25 gigs of hard disk space and you allocate 1gb per domain name you could only have 25 names.
Hope this helps.
You'll need one that deals with foldered index files such that you redirect (www.)mainsite.com/folder/index.html to www.example.com/ and you redirect (www.)mainsite.com/folder/subject/index.html to www.example.com/subject/ (stripping index name, removing /folder/, changing domain, and forcing www).
The other will be for redirecting mainsite.com/folder/ and www.mainsite.com/folder/ URLs over to www.example.com/ for all other (non-index) URLs within that site. The same rule will also deal with all files and folders at all other levels below this (removing /folder/, changing domain, and forcing www).
You'll need the above rules in addition to all of the canonicalisation that you would would normally do for example.com URLs.