Search Engine Watch has a great link building post today on the difference between using folders/directories or subdomains and how Google views both in terms of rankings.
You are going to get an education in subdomains today, because oddly, Search Engine Round Table also did a piece on the topic with the same Matt Cutts info, but taking another angle on the issue.
It’s not really odd. These search engine sites are just doing their jobs. Matt Cutts talks about something and they report it. The New York Times and USA Today will have the same cover stories frequently as well.
It seems there’s no difference in using a directory to put, say, your blog versus a subdomain. There are definitely preferences among site owners, but in the end it’s about the links. A sort of “My directory can beat your subdomain any day of the week” kind of thing if you have enough link popularity.