We may be talking apples and oranges here. There are sub-directories and there are sub-DOMAINS. The difference -
Sub-directory - www.yoursite.com/yoursubdirectory/yourpage.html
Sub-domain - yoursubdirectory.yoursite.com Note - no www. needed.
In the structure of your portion of the host server, the setup is the same, the sub-domain is actually a sub-directory. But, by using your control panel to create a sub-domain (which point to the sub-directory), you do indeed increase your chances of scoring with the SE's.
Making the sub-domain the keyword for each topic you want to promote will put it right out there for the SE's. I have seen several articles wondering why this has been overlooked by so many, for so long. It seems mainly to be used by companies supplying cookie-cutter sites to affiliate, dealers, etc. But it is a good way to sub-divide your server, create what is a unique URL, and not have to register and pay for a seperate domain name.
I know they don't want to link to articles and such, so I'll simply say do a google for "subdomains and search engines" and see what you get.
The "tree" will be the same as a sub-directory, but the fact that it's treated as an entirely different site by the SE's and the web in general, makes it a great way to have a number of "sites" under one main domain name.
Keep it a secret, don't spread the word too far.......