[jeffduck]

First - this is unquestionably the most interesting thread I've ever read.

Which would be better for sites that don't have valuable home page content such as for listings or directories? Assuming the only valuable content is in the folders or subdomain.

For example:
w7n.com/california and
w7n.com/florida would require common content for their shared home page.

california.w7n.com and
florida.w7n.com would not require anything other than the primary data (the listing) on the home page for each subdomain.