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more aimed towards building web apps than deciding where to put your blog, but someone from wuffoo strongly recommended against subdomains

http://particletree.com/notebook/subdomains-development-suck...

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Reason #2 really isn't a good one. It's pretty simple to setup subdomains locally (just use your hosts file to configure something like dev.whatever.yourdomain.com to point to localhost). Every webserver I know of supports name based virtualhosts, so it's not even like you need multiple IP's

you cant use wildcards within your hosts file, so you have to manually edit your hosts file for every new subdomain you want to use, I have had a huge hassle doing the same. particularly when you want 1. dynamically generated sub domains, 2. to test a lot of subdomains.

Unless you want to run bind of course

just have your regular DNS use localhost as a wildcard subdomain, say *.development.mysite.com

lvh.me domain is pointed to 127.0.0.1 so you can use subdomains if you're connected to the internet.

I think its pretty important for most people development setups to work offline

Well, then setup bind. It's not the end of the world :). That, or just use /etc/hosts, it's more of a pain, but for testing you just need a handful of URLs.

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