I agree with Cristian that subdomains do not carry the same weight, they are like starting again. John your observations are only true because I think you used allot of site wide links that give your subdomains the PR
value in the toolbar but there pages would never rank as well would they?
Using a folder is the way to go but remember this would add more pages. The more pages you have the less PR
would get spread and this is even reflected in the SERPS. If this was not true then every spammer would use an established domain and put hundreds of sites on them. However the more pages you have the more chance people will link to you and you can then start ranking like Amazon!
As for using different Class C IP that really is pointless because you only gain 1 or two IP's and that means very little for Search Engines.