I found this...(well it was in my inbox but...)
Sub Domains To Be Treated As Folders By Google
this could be trouble...my issue is my subdomain is totally different (subject/content wise) from my main domain. If google treats subdomain as a directory of the top level domain a lot of people would have to rethink how their doing things. But as the article says if google does this (treats subdomains like directories) then even their results would be revised. For some reason i don't think that matters to google at all. They much to big and strong to be worrying about search results when in fact they own them.
Anyways...but now that i think about it, it makes more sense for a subdomain to be at least a related offspring of the top level domain doesn't it? For the most part anyways or in situations where the top level domain maybe sells swiss watches. Why would their subdomain be offering local listings in web design. It really doesn't come across as logical.
Maybe google is logicalizing their algorithm.