A name within a name, subdomains are everywhere and you could have one too.

What are subdomains?
A subdomain is just a domain name with a prefix added to the front of it. You've probably seen them before-- news.yahoo.com, finance.yahoo.com, and my.yahoo.com are all subdomains of the domain Yahoo.com. Subdomains are also sometimes known as "Cnames" (canonical names) or "domain aliases".

What are subdomains used for?
The main benefit of a subdomain is that it is easier to remember than a long web address. In the early days of hosting, home page hosting services like Geocities issued addresses like:
www.geocities.com/SiliconValley/Heights/1234/ -- the sort of address that no one could remember easily. Then a few progressive hosting companies began offering free sub-domains of their own domain as an alternative to the longer Geocities-style addresses (for example 20m.com still offers whateveryouwant.20m.com). Because subdomains were free, and were basically unlimited in supply (If starwars.20m.com was already taken, it did not prevent someone else from registering starwars.somethingelse.com), they became a popular feature of many free hosting services.

On a traditional hosting service, subdomains are usually used to divide large web sites into logical sub-sites that are easy to remember, with each subdomain pointing to a specific file or folder on the web server. For example, yoursite.com might have subdomains for support.yoursite.com, corporate.yoursite.com, or eachpartner.yoursite.com.

What Features to Look For?
Although there is no real need for it, many web hosts choose to place artificial limits on the number of subdomains you can create, or charge a fee per subdomain after a certain number of freebies. This is mainly to protect the web host from users that get carried away in adding hundreds or thousands of subdomains, and possibly to discourage users from subdividing their web space and selling subdomain web sites themselves, undercutting the web host's business.

When shopping for subdomain-friendly web hosts, look for plans with no limits on the number you can create, or at least a minimal fee for each one added. You may want to ask the web host if you can setup the subdomains yourself from the a control panel, or you have to place a request to tech support to get it setup. Self-service is always preferable in my book.

Another issue you will want to ask about is whether there are restrictions on where the subdomain can point to. Can it point to another site, another folder within your site, a file within your site, or does it have to point to an IP Address. Depending on how you plan to use subdomains, you will want to know the answers to these questions up front.

One Caveat
There is one problem you should beware of when considering the use of subdomains: they are not very portable. By this I mean that if you should ever decide to change web hosting providers, you will find it tricky to get your site and all your subdomains moved to the new host without downtime or broken links. This is because of the many different ways each host can choose to implement subdomains. A good suggestion would be to choose an alternate hosting plan in advance that support the same subdomain features as your current host, so any forced move can go as smoothly as possible. Plus, if you are using a subdomain but don't own the domain itself (as is the case on most free hosting services) then you can't take your subdomain name with you to the new host at all.

Do I need subdomains?
Most sites do not need subdomains. If you have a very large site that could be logically divided into various sections, then you may be a candidate for needing subdomains. Some webmasters feel that they can gain an advantage in the search engines by using subdomains containing their main keywords. There is some merit to this strategy, but considering the complexity they can create when it comes time to move, small sites may want to think twice before using them.

Who offers subdomains?
The ability to have subdomains is more common on the higher-end web hosting packages, but can be also be found in a few low cost hosts. Some hosts offer the capability for an additional fee, charging for each new subdomain created. As mentioned, subdomains can also be found as a substitute for "real" domain names on many free hosting plans.