both. Just have the subdomain point to the directory, and SE's can pick and choose as can your patrons.
Assuming that all things (SEO techniques) are equal, forum.mysite.com will perform better (and stylish too).
Don't ask me why, but I've always had better success using domain.com/forum in the SE's. Technically forum.domain.com should work better - just for me that it's not. Otherwise, not much difference. /forum just adds one more directory deep for the spiders to crawl and pass on PR to.
I have nothing to offer from the SEO perspective but I have found that with certain hosts forum.site.com loads much slower than site.com/forum. It might be a DNS thing. I would advise trying both to see how they perform. Visitors won't put up with a slow loading forum.
Yeah, that sounds like a badly configured or just plain slow DNS server for sure. If both virtualhosts are set up in the same Apache, there's really no reason for a subdomain to load any slower than a subdirectory.
I'm thinking from an SEO standpoint, but wouldnt it be better to pick and promote one or the other? I personally use, and promote www.site.com/forum/ you could set up the subdomain, on the off chance that some users will just try this, since its a common thing for forums. Just don't promote it that way. I'd like to hear an official google oppinion on this? anyone got any connections ? Maybe Mr Cutts will be reading this?
Google supposedly treats subdomains as seperate sites and therefore calculates PR seperately. Therefore if you have a good PR on www.site.com and change it to forum.site.com, you'd have to start all over in terms of PR and make sure everyone that links to you updates their links.