is optimizing a subdomain worth it..? I mean will it have similar pagerank as the primary domain or interior pages or will it be a "0" ? I am asking because I have an interest in putting a small related directory within a website
Yes, if you want, but as for pagerank, it depends on the backlinks. You must know how to organize your niche because web directories are very broad, meaning it is difficult to optimize directories because millions (or billions) of it are indexed by Google.
actually, i'm not sure how true it is abt G recognizing it as a totally new domain. I have a blog attached to my directory on the sub-domain and without doing much link-building, i got a PR for the blog at PR(directory) - 1.
i know that on my main domain i have a PR2, however when i first created the sub-domain it also had a PR2.
but for sure if your subdomain for more quality backlinks and few more traffic. the subdomain will even can get a higher PR than the mainpage. but it not really help on SERPs though since you are not allow to submit the subdomain to the search engine if it's similar content. (am i wrong on this, please correct me)
subdomain is a new domain in the eye of google. you can apply the normal seo tech. to your subdomain. because it's a new domain
In general sub domains eat out your PR values. They are treated as separate site. But every thing depends upon the necessity, when you need a site on your subdomain, you have to use it. Instead of providing an outbound link from your main domain home page, use it as separate site, if they works can be a good backlink to your domain. I suggest if you focus on your necessities instead of PR will be best option.
Subdomain will be treated as an individual domain. For ex : dogs.xyz.com will be treated as a dogs domain where as, cats.xyz.com will be treated as a cats domain. Hope this helps. All Success, ~G