Domain.com/forum is better. Forum.domain.com seems to be a lot obsurd - and not as easier to remember.
Forgotten is right, stick with domain.com/forum. I think it's easier on your members to remember. The best solution however is to have the forums on the homepage, IMO.
Basically, I'm adding a comment or two. If you have a plan to set up a portal (in the future) and make a fancy entrance page on www, then use forum.xxx123abc.com. If not, you should just stick to www.
Place forum at root of directory if possible...and if VB or IPB, use a CMS/portal to integrate with the forum script...much cleaner appearance
/forum better, although forums.yoursite.com may actually perform better in terms of SEO since it is considered as a separate site.