* URI components have a wider scope of acceptable characters than domains, plus uri escaping e.g. spaces with a %20
* subdomains can be traffic shaped / cluster managed using IP addresses (until you run out if IPs)
* URI components can be traffic shaped using internal IPs via your web server
* In my experience it's easier to mod-rewrite and pass $1 than a DNS and parse a hostname
I remember lots of people going with subdomains that have since switched to URI components, particularly http://news.bbc.co.uk/ now goes to http://www.bbc.co.uk/news/ I would say that it is easier to categorize as one drills down. It is a shame that domains ended up backwards or else it would make more sense - http://uk.co.bbc/news
So my personal preference is for URI components