I had seen that free sub domains could do better in SEO also, just how your seo is perfect on the basis it goes up. the best example if http://www.peperonity.com this is a wap community and mobile sites, though it ranks among top on Google with the targeted keywords. See one example site here. Click Here Check in SEOdigger.com for the SERP listing for the same sub domain.
It has effect but not much .. Keywords in URL will help to over come such issues like file names with keywords will defiantly gone help
I don't think it is. Think for yourself. Does "DigitalPoint.Com" have anything to do with WEBMASTER FORUMS ? No, it doesn't. Neither does "Google.Com" have anything to do with WEB SEARCH. Personally one of my domains which was actually a subdomain like this XXXXXXXXXXXXXX.7.forumer.com was PR6 with many PR6 pages. So the answer is NO.