Subdomain vs Directory vs Root?

Does it make a difference when targetting keywords if the one you put in your domain is a subdomain vs a directory?

Or, is it better (to rank higher) to just put the content in the root folder, if there is no actual server-conflict need to put it in a subdomain or directory?

Thanks

 

I hope this will help u:
http://www.mattcutts.com/blog/subdomains-and-subdirectories/

 

I have always preferred subdirectories. Subdomains can be seen as whole new sites, not just another section of your site.