I'm adding a niche directory to a site and am trying to figure out which would be better, a subdomain or just /directory. I want the search engines to index the pages of the directory. Does it make a difference which way I do it?
I would do /directory, this will most likely get your directory page indexed faster. Just make sure you link to it from every single page in your site.
Good discussion about the pros and cons of each approach can be found here: http://www.v7n.com/forums/seo-forum/30267-folders-versus-subdomains.html
I think its all personal preference and with that being said my personal preference would be directory.site.com
Doing it on a subdomain is like starting with a fresh domain, so I would go for the forward slash one.