Don't forget, there's more then just SEO involved with good marketing.
I've never bothered with subdomains, so I can't comment on the difference, but I can say that sometimes it's not about how much traffic you get but how you best use the traffic you do get. I like Walrus' suggestion, because, as a freesite builder myself, I can attest to the success of the traffic flow model he outlined.
The freesite/hub model Walrus mentioned works because the traffic flows more easily from a general area of interest to a specific desired flavor - it makes it easier for the surfer to find what they're looking for, even if they haven't exactly figured it out until they've landed on your network.
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~Warm and Fuzzy.
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